The Herfindahl-Hirschman index is a measure of
A)market size.
B)firm size.
C)the degree of firm responsiveness to a change in demand.
D)the degree of concentration in a market.
E)the degree of collusion among firms in a market.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman index (HHI) measures the degree of concentration in a market by summing the squared market shares of all firms in the market. A high HHI indicates that the market is dominated by a few large firms, while a low HHI suggests a more competitive market with many smaller firms.

The Herfindahl-Hirschman Index Is a Measure of