Breakfast Cereals Kellogg's General Mills General Foods 42% 18% 16% Music Universal Music Sony BMG Wamer EMI 32% 25% 20%

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Breakfast Cereals Kellogg S General Mills General Foods 42 18 16 Music Universal Music Sony Bmg Wamer Emi 32 25 20 1 (23.1 KiB) Viewed 26 times

Breakfast Cereals Kellogg S General Mills General Foods 42 18 16 Music Universal Music Sony Bmg Wamer Emi 32 25 20 2 (46.3 KiB) Viewed 26 times

Breakfast Cereals Kellogg's General Mills General Foods 42% 18% 16% Music Universal Music Sony BMG Wamer EMI 32% 25% 20% 9% Fast Food McDonalds Burger King Wendy's KFC Hardees Pizza Hut 20% 9% 5% 5% 4% 4% Concentration Ratio HHI Concentration Ratio HHI Soft Drinks Coca Cola Pepsi Dr Pepper/7UP Concentration Ratio HHI Tires Michelsen Uniroyal Goodnch Goodyear Firestone Sumitomo Dunlop Pirell/Amstrong Continental Genera Yokohama 44% 31% 15% 3% 2% 229 18% 17% 8% 7 7% 4% Aspirin Bayer Excedran Bufferin Anacin Cott 18% 18% 11% 8% National Beverage Concentration Ratio HHI Concentration Ratio HHI = Concentration Ratio HHI

Which is a measure is more accurate measurement of market concentration, the concentration ratio or the HHI? Why? The concentration provides a better measurement of overall market concentration. This is due to the fact that the concentration ratio weighs individual market shares more heavily than the HH. For instance two different markets can have exactly the same concentration ratio, but wildly different HHis due to the way the concentration weighs individual market shares. The concentration ratio provides a more accurate measurement of market concentration due to the fact that it includes a greater number of firms in its calculation. The HHI provides a better measurement of overall market concentration. This is due to the fact that the HHI weighs individual market shares more heavily than the concentration ratio. For instance two different markets can have exactly the same concentration ratio, but wildly different HHis due to the way the HHI weighs individual market shares. Neither of the two measurements of concentration provide a more accurate measurement of market concentration.