The Herfindahl-Hirschman Index (HHI) is used by the Department of Justice and Federal Trade Commission to measure the ________.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) measures the concentration in an industry by calculating the sum of the squares of the market shares of all firms in the industry. The Department of Justice and Federal Trade Commission use this index to assess the level of competition and to determine whether a proposed merger or acquisition would result in a substantial lessening of competition. Therefore, the correct answer is D, market concentration in an industry.

The Herfindahl-Hirschman Index (HHI) Is Used by the Department of Justice