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Question: problem 1 concentration a cigarette industry consists of 4 firms...

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Problem 1: Concentration. 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 at P-2. The demands Q1 , Q2·Qs. Q4 for firms 1.2.3.4 are given by Q17 P2, Q2 6 2P, Qs 2 - P/2, and Q4 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? (d) Come up with an example of market shares in an industry with four firms, such that the 2-largest-firm concentration is no more than 50 (for example, if market shares are 10, 10, 30, 50, then the 2-largest-firm concentration is 80, which is more than 50. So this example is not an answer to the question). Come up with another example of market shares in an industry with ten firms, such that the HHI is no more than 1100

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