Question

2) Assume that a market contains 4 firms. The market shares of the 2 largest are 50% and30%, and the sum of the market share of the two smallest is

20 percent. The lower bound of the Herfindahl index for this market is a) 0.350 (or 3500 with alternative definition) b) 0.355 (or 3550 with alternative definition) c) 0.360 (or 3600 with alternative definition) d) None of the above.

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