Consider Two Industries Described by the Data Below

Consider two industries described by the data below. Should we use a structural analysis of markets approach or a contestable market approach to analyze the competitiveness of each industry? Analyze the industries using the correct approach and explain what information we need to use the other approach. $$\begin{array} { c c c } \text { Industry } & \text { Herfindahl index value } & \begin{array} { c } \text { Four-firm } \\\text { concentration ratio }\end{array} \\\text { A } & 7,500 & 80 \\\text { B } & 1,000 & 20\end{array}$$

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Using a structural analysis of markets a...

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