There are 6 firms in a market and the market shares of the firms are 40 percent, 30 percent, 10 percent, 8 percent, 7 percent, and 5 percent. The Herfindahl-Hirschman index is

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by squaring the market share of each firm and then summing the results: (40^2) + (30^2) + (10^2) + (8^2) + (7^2) + (5^2) = 1600 + 900 + 100 + 64 + 49 + 25 = 2738.

There Are 6 Firms in a Market and the Market