A Herfindahl-Hirschman Index is calculated by
A)summing the amount of sales by the four largest firms and dividing by total industry sales.
B)dividing the number of firms wanting to merge by the total number in the industry.
C)summing the squares of the market shares of each firm in the industry.
D)dividing the advertising expenditures of the firms that want to merge by total industry advertising expenditures.

Question

Quizplus · Accepted Answer

The Herfindahl-Hirschman Index is calculated by summing the squares of the market shares of each firm in the industry. It is used as a measure of market concentration and is often used by antitrust regulators to determine the competitiveness of a market. The higher the index, the more concentrated the market.

A Herfindahl-Hirschman Index Is Calculated by