Industries X and Y both have four-firm concentration ratios of 32 percent, but the Herfindahl index for X is 256, while that for Y is 264. These data suggest

A) greater market power in X than in Y.
B) greater market power in Y than in X.
C) both industries are strongly oligopolistic.
D) that price competition is stronger in Y than in X.

Herfindahl Index

A measure of market concentration used to determine the level of competition within an industry, calculated by summing the squares of the market shares of all firms in the industry.

Market Power

The ability of a firm or group of firms to influence or control the prices and total output in a market, often due to limited competition or holding a dominant position.

Price Competition

A market situation where businesses attempt to outdo competitors by offering goods or services at lower prices.