If the market is defined more narrowly to include only a more restricted range of products, then the Herfindahl index will
A)increase.
B)decrease.
C)not be affected.
D)either increase or decrease.

Question

Quizplus · Accepted Answer

When the market is defined more narrowly to include only a more restricted range of products, the Herfindahl index, which measures market concentration, will increase. This is because a narrower market definition typically means fewer competitors, leading to higher concentration levels.

If the Market Is Defined More Narrowly to Include Only