Answer:
4112
Step-by-step explanation:
Calculation to determine the Herfindahl-Hirschman index (HHI)
First step is to calculate the Total sales of the industry
Total sales of the industry=$300,000+$700,000+$250,000
Total sales of the industry=1,250,000
Second step is to Allocate
Firm A= $300,000/$1,250,000
Firm A=0.24
Firm B= $700,000/$1,250,000
Firm B=0.56
Firm C=$250,000/$1250,000
Firm C=0.2
Now let calculate the Herfindahl-Hirschman index (HHI).
Herfindahl-Hirschman index (HHI)=1000*[(0.24)^2+(0.56)^2+(0.2)^2]
Herfindahl-Hirschman index (HHI)=10000*(0.0576 + 0.3136 + 0.04 )
Herfindahl-Hirschman index (HHI)=10000 * 0.4112
Herfindahl-Hirschman index (HHI)=4112
Therefore the Herfindahl-Hirschman index (HHI) is 4112