Question

carrot computers and its competitors purchase touch screens for their tablet computers from several suppliers. the six makers of touch screens have market shares of, respectively, 19 percent, 18 percent, 14 percent, 16 percent, 20 percent, and 13 percent. instructions: enter your answers as a whole number. a. what is the herfindahl index for the touch screen manufacturing industry?

Answer 1

The Herfindahl Index for the touch screen manufacturing industry is calculated by squaring each firm's market share and summing these numbers, resulting in an HHI of 1706.

Step-by-step explanation:

The Herfindahl-Hirschman Index (HHI) is a measure of market concentration that takes into account the market share of each company within an industry. To calculate the HHI for the touch screen manufacturing industry, we square the market share percentage of each company and then sum these numbers together. The market shares given for the six companies are 19%, 18%, 14%, 16%, 20%, and 13%. Therefore, we calculate the HHI as follows:

• 19%^2 = 361
• 18%^2 = 324
• 14%^2 = 196
• 16%^2 = 256
• 20%^2 = 400
• 13%^2 = 169

Adding these numbers together:

361 + 324 + 196 + 256 + 400 + 169 = 1706

The Herfindahl Index for the touch screen manufacturing industry is 1706.