The Herfindahl-Hirschman (HH)Index is used to
A)measure the degree of nonprice competition.
B)measure the degree of market concentration in an industry.
C)measure the extent of price leadership.
D)None of the above

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HH Index) is a measure of market concentration and is commonly used in antitrust analysis to assess the level of competition within an industry. The index ranges from close to zero for a highly competitive market to 10,000 for complete market domination by one firm. A higher HH Index indicates a higher degree of market concentration and a lower level of competition, which can be a concern for antitrust regulators. Nonprice competition and price leadership are not directly related to the HH Index.

The Herfindahl-Hirschman (HH)Index Is Used to