QUESTION 14 Given 7 pharmaceutical companies (A,B,C,D,E,F,G) in the asthma care

Question

QUESTION 14 Given 7 pharmaceutical companies (A,B,C,D,E,F,G) in the asthma care industry : Firm A occupies 14%, Firm C occupies 15%, Firm D occupies 9%, Firm F occupies 10% ; and Firm E occupies 12%. What is the HH Index in this industry ? (up to 3 decimal places) a. 0.007 b. 0.105 c. 0.925 d. not enough information given e. none of the above

In number 14 (above) multiple choice, assume Firm G’s share is 3x the share of firm B. What are the actual shares of firms G and B? Given this additional info, what is the HH Index in the industry? BONUS2 On the R-S model where is the area of partial insurance? Explain why it is located in this area? (5 points) BONUS3 For the 5 firms competing in the medical tele tracking industry, Firm X occupies 11% of the industry, Firm Y has $1 million in revenues, Firm Z has 13% share and Firm V has $2 million in revenues. Firm U occupies 16%. If total revenues = $5 million determine: a. Shares of Firms Y and V b. Total industry revenue c. Revenues of Firms X, Z, and U d. HH Index

Explanation / Answer

let share of Firm "B" is x

and share of firm "G" is 3x

then from the question,

A+B+C+D+E+F+G=100

or, 14+x+15+9+10+12+3x=100

or, 60+4x=100

or, x=10

Share of Firm "B"=10%

Share of firm "G"=30%

HH index=142+102+152+92+102+122+302

   =196+100+225+81+100+144+900

= 1746

thus, HH index=1746

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