-In Exhibit L-2, the table shows the market shares of five firms that operate in three different industries. Using the HHI, the most concentrated of these three industries is(are)
A) Industry I
B) Industry II
C) Industry III
D) Industries I and III (their HHIs are identical)
E) Industries II and III (their HHIs are identical)

Question

-In Exhibit L-2, the table shows the market shares of five firms that operate in three different industries. Using the HHI, the most concentrated of these three industries is(are)
A) Industry I 
B) Industry II 
C) Industry III 
D) Industries I and III (their HHIs are identical) 
E) Industries II and III (their HHIs are identical)

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by summing the squares of the market shares of all firms in the industry. Industry III has the highest HHI, indicating it is the most concentrated.

-In Exhibit L-2, the Table Shows the Market Shares of Five