A concentration ratio provides a better assessment of market power than the Herfindahl-Hirschman index does.

Name: A concentration ratio provides a better assessment of market power than the Herfindahl-Hirschman index does.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) provides a more detailed and comprehensive measure of market concentration and competitive conditions than the concentration ratio, as it takes into account the market share of all firms in the industry, not just the largest ones.

A Concentration Ratio Provides a Better Assessment of Market Power