Industries X and Y both have four-firm concentration ratios of 48 percent, but the Herfindahl index for X is 860, while that for Y is 898. 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 monopolistically competitive.
D) that price competition is stronger in Y than in X.

Herfindahl Index

An economic indicator used to assess industry concentration by adding up the squares of individual firms' market shares, highlighting monopoly power.

Market Power

The ability of a firm or group of firms to control prices or exclude competition in a particular market.

Price Competition

A situation in which sellers actively compete with one another to offer goods or services at the lowest possible price.