Industry Y is dominated by five large firms that hold market shares of 41, 21, 17, 12, and 9. The Herfindahl index for this industry is

Question

Quizplus · Accepted Answer

The Herfindahl index is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. For this industry, the calculation would be as follows: $41^2 + 21^2 + 17^2 + 12^2 + 9^2 = 1681 + 441 + 289 + 144 + 81 = 2636.$

Industry Y Is Dominated by Five Large Firms That Hold