Final answer:
Cross-section analysis in business refers to comparing a company against other firms in its industry at a specific point in time. It uses various financial ratios and metrics for comparative purposes. The Herfindahl-Hirschman Index is an example of an analytical tool used in such analyses.
Step-by-step explanation:
Cross-section analysis generally refers to the method of comparing different segments or entities at a single point in time. In the context of business and finance, it can mean comparing a firm to other firms in its industry to evaluate its performance or positioning within the market. This can involve looking at various metrics and financial ratios to see how a company stacks up against its competitors in terms of efficiency, profitability, market share, and more.
However, it's important to note that cross-section analysis can sometimes refer to comparisons within different segments of the population, as in the case of studying dietary habits across age groups. Meanwhile, approaches like the Herfindahl-Hirschman Index (HHI) provide a quantitative measure of market concentration and can be part of a broader cross-section analysis within an industry.