The Herfindahl-Hirshman Index is the sum of the
A) Squared market shares of the firms in the market.
B) Market shares of all the firms in the market.
C) Market shares of the top four firms in the market.
D) Squared concentration ratios for the firms in the market.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirshman Index calculates the market concentration by taking the sum of the squared market shares of all firms in the market. This gives a higher weight to larger firms in the market and reflects the degree of competition in the industry.

The Herfindahl-Hirshman Index Is the Sum of the