Assume six firms comprising an industry have market shares of 30,30,10,10,10,and 10 percent.The Herfindahl index for this industry is:

Question

Quizplus · Accepted Answer

The Herfindahl index is calculated by summing the squares of the market share percentages of all firms in the industry. For this industry, it would be (30^2) + (30^2) + (10^2) + (10^2) + (10^2) + (10^2) = 900 + 900 + 100 + 100 + 100 + 100 = 2,200.

Assume Six Firms Comprising an Industry Have Market Shares of 30,30,10,10,10,and