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Question: a cigarette industry consists of 4 firms each producing a...

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A cigarette industry consists of 4 firms, each producing a differentiated product. As common in the tobacco industries, the prices of the differentiated products are the same atP= 2. The demandsQ1,Q2,Q3,Q4for firms 1,2,3,4 are given byQ1= 7−P2,Q2= 6−2P,Q3= 2−P/2, andQ4= 12−P3.

(a) What is the market share of each of the four firms?

(b) What is the 3-largest-firm concentration?

(c) What is the HHI?

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