To calculate the Herfindahl-Hirschman index (HHI),one must _____ market share(s)of _____ in the industry.
A)sum the;the four largest firms
B)sum the;all of the firms
C)divide the;the largest firm by the sum of the four largest firms
D)sum the squared;all of the firms

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman index (HHI) is calculated by summing the squares of the market shares of all the firms in the industry. This method accounts for both the size of firms and the distribution of market shares among them, providing a measure of market concentration.

To Calculate the Herfindahl-Hirschman Index (HHI),one Must _____ Market Share(s)of