Asked by
Sharifah Hafizah
on Nov 26, 2024Verified
The Herfindahl index measures the
A) size of the market share of the four largest firms in an industry.
B) sum of the squared values of market shares of firms in an industry.
C) increase in economic concentration resulting from a conglomerate merger.
D) effect of per se violation in antitrust cases.
Herfindahl Index
A measure of market concentration that is calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers.
Economic Concentration
The degree to which a small number of firms occupy a large proportion of the market in a particular industry.
Market Shares
The portion of a market controlled by a particular company or product.
- Comprehend the purpose and calculation of the Herfindahl Index in measuring market concentration.
Verified Answer
CA
Learning Objectives
- Comprehend the purpose and calculation of the Herfindahl Index in measuring market concentration.