Assignment: Imagine that you are employed by the U.S. Department of Justice and you are on the team that must determine the type of market structure for the tattoo industry. Table 1 shows the total revenue of the 50 firms in the tattoo industry.

First, calculate the market share by dividing the total revenue of the firm (numerator) by the total industry revenue (denominator) for each firm. See the example for Tattoo Time.

Don't use plagiarized sources. Get Your Custom Essay on
Get an essay WRITTEN FOR YOU, Plagiarism free, and by an EXPERT!
Order Essay

The four-firm concentration ratio is 46.6. Calculate the HHI using the HHI formula. Based on Table 2, what is the market structure of the tattoo industry? (Perfect, monopoly, monopolistic, oligopoly)
What would the market structure of the tattoo industry be if each firm operated in a different city and the cities were spread across the nation (Hint: keep in mind there are only 50 firms in the industry)
What additional information would you need about the tattoo industry to be sure that it is an example of monopolistic competition?
Suppose that a new tattoo technology makes it easier for anyone to enter the tattoo market. How might the market structure change?
Based on your answer, why is it important to calculate the know the HHI as it relates to competition?

Table 1

Firm Total Revenue Market share

(dollars) (total revenue/industry)

Tattoo Time 450 17.1

My Tat 325

Love Lines 250

Native Birds 200

Next 16 firms (each) 50

Next 30 firms (each) 20

Industry 2,625


How to calculate The Herfindahl-Hirschman Index (HHI)

The Herfindahl-Hirschman Index – also called the HHI – is the square of the percentage market share of each firm summed over the 50 largest firms (or summed over all the firms if there are fewer than 50 ) in a market. For example if there are four firms in a market and the market shares of the firms are 50 percent, 25 percent, 15 percent, and 10 percent, the Herfindahl-Hirschman Index is

HHI = 502 + 252 + 152 + 102 = 3,450.

In perfect competition, the HHI is small. For example, if each of the 50 largest firms in an industry has a market share of 0.1 percent, the HHI is 0.12 X 50 =0.5. In a monopoly, the HHI is 10,000 – the firm has 100 percent of the market: 1002 = 10,000.


The HHI became a popular measure of the degree of competition during the 1980s, when the Justice Department used it to classify markets. A market in which the HHI is less than 1,000 is regarded as being competitive and an example of monopolistic competition. But a market in which the HHI exceeds 1,800 is regarded as competitive. The Justice Department scrutinizes any merger of firms in a market in which the HHI exceeds 1,000 ad is likely to challenge a merger if the HHI exceeds 1,800.


Link to table 2


Submission Method: Submit your response as a written document in Word format not to exceed 300 words. Include in your narrative the answers to the questions in complete sentences. Be sure to show the mathematical computation for the HHI formula as shown in the example above to support your findings.

Homework Paper
Order NOW For A 10% Discount!
Pages (550 words)
Approximate price: -

Our Advantages

Plagiarism Free Papers

All our papers are original and written from scratch. We will email you a plagiarism report alongside your completed paper once done.

Free Revisions

All papers are submitted ahead of time. We do this to allow you time to point out any area you would need revision on, and help you for free.

Free Title-page

A title page preceeds all your paper content. Here, you put all your personal information and this we give out for free.

Free Bibliography

Without a reference/bibliography page, any academic paper is incomplete and doesnt qualify for grading. We also offer this for free.

Originality & Security

At Homeworkpaper.net, we take confidentiality seriously and all your personal information is stored safely and do not share it with third parties for any reasons whatsoever. Our work is original and we send plagiarism reports alongside every paper.

24/7 Customer Support

Our agents are online 24/7. Feel free to contact us through email or talk to our live agents.

Try it now!

Calculate the price of your order

We'll send you the first draft for approval by at
Total price:

How it works?

Follow these simple steps to get your paper done

Place your order

Fill in the order form and provide all details of your assignment.

Proceed with the payment

Choose the payment system that suits you most.

Receive the final file

Once your paper is ready, we will email it to you.

Our Services

We work around the clock to see best customer experience.


Flexible Pricing

Our prices are pocket friendly and you can do partial payments. When that is not enough, we have a free enquiry service.


Admission help & Client-Writer Contact

When you need to elaborate something further to your writer, we provide that button.


Paper Submission

We take deadlines seriously and our papers are submitted ahead of time. We are happy to assist you in case of any adjustments needed.


Customer Feedback

Your feedback, good or bad is of great concern to us and we take it very seriously. We are, therefore, constantly adjusting our policies to ensure best customer/writer experience.