In 2000, the Hirschman -Herfindahl Index (HHI) was calculated to find the market concentration in the Egyptian steel industry and was found to be 3,822. This number means
A) the number has no indication of market power concentration in the Egyptian steel industry.
B) the calculated monopolistic performance from the HHI of the entire Egyptian steel industry appears to exceed one -third the scale of monopoly power.
C) the Egyptian steel industry is perfectly competitive.
D) the Egyptian steel industry is dominated by a single complete monopoly.

Question

Quizplus · Accepted Answer

The Hirschman-Herfindahl Index (HHI) is a measure of market concentration and ranges from close to zero to 10,000, where a higher number indicates a higher level of concentration. An HHI of 3,822 suggests significant market concentration, exceeding the threshold that indicates monopolistic power, but not to the extent of a complete monopoly.

In 2000, the Hirschman -Herfindahl Index (HHI) Was Calculated to Find