Which of the following has the highest Herfindahl-Hirschman index?
A) monopoly
B) monopolistic competition
C) oligopoly
D) any of the above, depending on the size of firm sales

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman index (HHI) measures the degree of market concentration in an industry. The higher the HHI, the greater the market power of the firms in the industry. A monopoly has the highest HHI because there is a single firm dominating the industry with 100% market share, resulting in the highest level of concentration. Thus, choice A has the highest HHI.

Which of the Following Has the Highest Herfindahl-Hirschman Index