If there are ten firms in a market and each has an equal market share, the Herfindahl- Hirschman Index (HHI)is _____.
A)1,500
B)10,000
C)100
D)1,000

Question

Quizplus · Accepted Answer

HHI is calculated by squaring the market share of each firm in the market and summing up the resulting numbers. In this case, since each firm has an equal market share of 1/10, the HHI would be (1/10)^2 * 10 = 1. Therefore, the correct choice is D) 1,000.

If There Are Ten Firms in a Market and Each