The Herfindahl-Hirschman Index of a pure monopoly
A) is equal to 10,000.
B) is equal to the four-firm concentration ratio.
C) is equal to 100.
D) cannot be measured because there is no competition.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by squaring the market share of each firm competing in the market and then summing the resulting numbers. In the case of a pure monopoly, where one firm controls 100% of the market, the HHI is 100^2, which equals 10,000. This reflects the highest possible level of market concentration under the HHI.

The Herfindahl-Hirschman Index of a Pure Monopoly