What would the Herfindahl-Hirschman Index equal for an industry consisting of 20 firms with each holding a 5% market share?
A)20
B)100
C)500
D)2,500

Question

What would the Herfindahl-Hirschman Index equal for an industry consisting of 20 firms with each holding a 5% market share?
A)20 
B)100 
C)500 
D)2,500

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by summing the squares of the market shares of all firms in the industry. For 20 firms each with a 5% market share, HHI = 20 * (5^2) = 20 * 25 = 500.

What Would the Herfindahl-Hirschman Index Equal for an Industry Consisting