If there are four firms in a market,each with a 25 percent share,the final Herfindahl-Hirschman Index is ______.
A) 4000 points
B) 2000 points
C) 25 points
D) 4 points
E) 2500 points

Question

Quizplus · Accepted Answer

Market concentration is measured using the Herfindahl-Hirschman Index (HHI), which squares the market share of each firm in the market and adds them together for a final number. Squaring the market share of each firm gives 625. 625 times four is 2500.

If There Are Four Firms in a Market,each with a 25