The Herfindahl-Hirschman Index is used to ________.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is a measure of market concentration calculated by summing the squared market shares of all firms in an industry. It is used to estimate the degree of competition in an industry with higher values indicating a less competitive market. Therefore, option B is the best answer. Option A and C are not correct since they refer to price elasticity rather than market concentration, while option D is not correct since HHI does not directly measure profits earned by firms.

The Herfindahl-Hirschman Index Is Used to ________