The sum of the squared market shares of each firm in an industry is the:
A)concentration ratio.
B)employment rate.
C)Herfindahl-Hirschman index.
D)market number.

Question

Quizplus · Accepted Answer

The calculation of the sum of the squared market shares of each firm in an industry is known as the Herfindahl-Hirschman index (HHI). It is a commonly used measure of market concentration in antitrust analysis. The higher the index, the greater the concentration of market power in the hands of a few large firms.

The Sum of the Squared Market Shares of Each Firm