Question

QUESTION 1

The information below sets out the estimated market shares for the cellular phone manufacturing market
Market Share
36%
3%
Firm
Nokia
Fujitsu
Kyocera
LG
Motorola
Samsung
Sanyo
Siemens
Sony Ericsson
Plus 8 more firms with 1% each
3%
6%
16%
6%
4%
7%
11%
Based on this information, the Herfindahl-Hirschman Index is
1,272
2,216
1,836
1,800

Answer 1

The correct option is C (1836)

Step-by-step explanation:

From the given data, all the frims with the given market share are taken. the 8 more firms are taken into account which have 1 percent market share. Thsu, 8 is multiplied with 1 pecent of share.

All the square roots are calculated in order to calculate the HHI

HHI = Summation of sqrt Si

= (36)^2 + (3)^2 + (3)^2 + (6)^2 + (16)^2 + (6)^2 + (4)^2 + (7)^2 + (11)^2 + 8(1)^2

= 1836

Therefore, the correct answer is C (1832)