A market in which the Herfindahl-Hirschman Index exceeds 1,800 is considered to be
A) competitive.
B) not competitive.
C) moderately competitive.
D) purely competitive.
E) either a monopoly or monopolistic competition.

Question

Quizplus · Accepted Answer

A Herfindahl-Hirschman Index exceeding 1,800 suggests a highly concentrated market, indicating significant market power held by a few dominant firms. Such a market is not competitive as there are significant barriers to entry for new firms and the dominant firms can influence market outcomes such as pricing and output.

A Market in Which the Herfindahl-Hirschman Index Exceeds 1,800 Is