Asked by
AL-Hussein Alshamsi
on Nov 05, 2024
Verified
If there are four firms in an industry and each has a 25 percent market share, then the Herfindahl-Hirschman Index equals
A) 2,500.
B) 2,800.
C) 5,000.
D) 6,600.
Herfindahl-Hirschman Index
A measure used to quantify the level of competition within an industry, calculated by squaring the market share of each firm and summing the total.
Market Share
The percentage of an industry's sales that a particular company controls.
- Compute the Herfindahl-Hirschman Index (HHI) and examine the level of market concentration.
- Differentiate among varying degrees of market concentration as measured by the Herfindahl-Hirschman Index (HHI).
Verified Answer
TT
Learning Objectives
- Compute the Herfindahl-Hirschman Index (HHI) and examine the level of market concentration.
- Differentiate among varying degrees of market concentration as measured by the Herfindahl-Hirschman Index (HHI).