If a market is shared equally by four firms, the Herfindahl-Hirschman Index is
A) 1/4.
B) 4.
C) 25.
D) 2,500.

Name: If a market is shared equally by four firms, the Herfindahl-Hirschman Index is A) 1/4. B) 4. C) 25. D) 2,500.
Brand: Quizplus
Rating: 4.8 (36 reviews)

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by squaring the market share of each firm and then summing the results. If four firms share the market equally, each has a 25% share. The HHI is (25^2) + (25^2) + (25^2) + (25^2) = 2,500.

If a Market Is Shared Equally by Four Firms, the Herfindahl-Hirschman