The text states that the Herfindahl-Hirschman Index (HHI) for electronic computers is 680, while the HHI for chocolate is 2,188. We can interpret this to mean that
A) people buy more chocolate than computers
B) the price of computers is higher than the price of chocolate
C) the demand for computers is relatively more inelastic than the demand for chocolate
D) market power is more heavily concentrated in the chocolate market than in the computer market
E) computers are more of a necessity than chocolate

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index (HHI) measures market concentration. A higher HHI indicates a more concentrated market. Therefore, with a higher HHI for chocolate (2,188) compared to electronic computers (680), it means market power is more heavily concentrated in the chocolate market.

The Text States That the Herfindahl-Hirschman Index (HHI) for Electronic