What is the Herfindahl-Hirschman Index if the four firms in an industry account have market shares of 62 percent,15 percent,15 percent,and 8 percent?
A) 100
B) 4,358
C) 111,600
D) 2,822
E) 6,200

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. For the given market shares: (62^2) + (15^2) + (15^2) + (8^2) = 3844 + 225 + 225 + 64 = 4358.

What Is the Herfindahl-Hirschman Index If the Four Firms in an Industry