Suppose that the most popular car dealer in your area sells 4 percent of all vehicles.

instructions: enter your answers as whole numbers.

a. if all other car dealers sell either the same number of vehicles or fewer, what is the largest value that the herfindahl index could possibly take for car dealers in your area? .

b. in that same situation, what would the four-firm concentration ratio be? percent.

Brian has just finished college. he wants to set up a small business to make and sell fireworks. he registers his company and acquires a license from the government. he finds that most of his competitors are selling fireworks at an extremely low price. he would like to make more money, so he decides to innovate and develop better fireworks. he sells his fireworks at a higher price, and they are a huge hit with the customers. after a few years, he earns enough profit to set up a bigger fireworks factory that complies with the government’s health and safety regulations. he even starts exporting fireworks overseas. which type of economy does this scenario describe?