If the market is defined more narrowly to include only a more restricted range of products, then the Herfindahl index will
A) increase.
B) decrease.
C) not be affected.
D) either increase or decrease.

Question

Quizplus · Accepted Answer

A narrower market definition typically means fewer firms and products, leading to a higher concentration and thus an increase in the Herfindahl index.

If the Market Is Defined More Narrowly to Include Only