Which of the following is a measure of the degree of industry concentration?
A) Dow Jones Industrial Average
B) Herfindahl Index
C) Employment Cost Index
D) S&P 500 Index

Question

Quizplus · Accepted Answer

The Herfindahl Index is a commonly used measure of market concentration in which the market share of each firm is squared and then added together. The resulting score ranges from close to 0 for a perfectly competitive market to 10,000 for a monopoly. The higher the score, the more concentrated the market. The other options listed are financial measures or indicators that do not specifically measure industry concentration.

Which of the Following Is a Measure of the Degree