Exhibit 26-2

-Refer to Exhibit 26-2.The industry's Herfindahl index in Year 2 was

Name: Exhibit 26-2 -Refer to Exhibit 26-2.The industry's Herfindahl index in Year 2 was
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Question

Exhibit 26-2
 
-Refer to Exhibit 26-2.The industry's Herfindahl index in Year 2 was

Quizplus · Accepted Answer

The Herfindahl index is calculated by squaring the market share of each firm in the industry and then summing the results. In Year 2, Firm A has a market share of 50%, Firm B has a market share of 25%, and Firm C has a market share of 25%. Therefore, the Herfindahl index is (0.5^2) + (0.25^2) + (0.25^2) = 0.375.

Exhibit 26-2 -Refer to Exhibit 26-2.The Industry's Herfindahl Index in Year 2