In the personal computer (PC) market in the first half of 2008, Hewlett-Packard maintained its worldwide No. 1 ranking at a market share of 19.1 percent. Dell's market share was 16 percent, Acer held onto third place with a 9.5 percent share, and Lenovo maintained fourth place with a 7.9 percent share. Predict the range of the Herfindahl-Hirschman Index for the PC market.
A) 0 - 100
B) 100 - 999
C) 10,000
D) 800 - 1,200

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) is calculated by summing the squares of the market shares of all firms in the market. For the given market shares, the HHI would be calculated as follows: (19.1^2) + (16^2) + (9.5^2) + (7.9^2) + ... for all firms. This results in an HHI in the range of 800 - 1,200.

In the Personal Computer (PC) Market in the First Half