In the figure, D is the demand curve for taxi rides in a town, and ATC is the average total cost curve of a taxi company.
-In an oligopoly market, the Herfindahl-Hirschman Index is usually
A) greater than 2,500.
B) below 1,000.
C) between 100 and 1,000.
D) between 200 and 2,000.

Question

In the figure, D is the demand curve for taxi rides in a town, and ATC is the average total cost curve of a taxi company.
-In an oligopoly market, the Herfindahl-Hirschman Index is usually
A) greater than 2,500. 
B) below 1,000. 
C) between 100 and 1,000. 
D) between 200 and 2,000.

Quizplus · Accepted Answer

In an oligopoly market, a few firms dominate, leading to a high concentration of market share. The Herfindahl-Hirschman Index (HHI) measures market concentration, and in an oligopoly, it is typically greater than 2,500, indicating high concentration.

In the Figure, D Is the Demand Curve for Taxi