The Herfindahl-Hirschman Index is calculated as
A)the cube of the percentage market share of each firm summed over the largest 100 firms.
B)the square of the percentage market share of each firm summed over the largest 50 firms or summed over all the firms if there are fewer than 50.
C)the square of the percentage market share of each firm summed over the largest 20 firms.
D)double the market share of the five largest firms.
E)the percentage of the total revenue accounted for by the four largest firms in the industry.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. It can be summed over the largest 50 firms or all firms if there are fewer than 50 in the market.

The Herfindahl-Hirschman Index Is Calculated as