Suppose that a small town has six burger shops whose respectiveshares of the local market are (as percentages of all hamburgerssold): 26%, 20%, 18%, 14%, 12%, 10%,
a) What is the four-firm concentration ratio ofthe hamburger industry and what is the Hirchmann HerfindahlIndex (HHI) for the hamburger industry in thistown?                                                                     Â
b) Assume that the largest producer now purchases the thirdlargest firm (based market share) so that this new combined firmhas the same market share as old firm 1 and old firm 3 combined.Compute the new four-firm concentration ratio andto the new HHI?
