Question

Consider a market with four firms. suppose the first firm has a 49​% market​ share, the second firm has a 35​% market​ share, the third firm has a 15​% market​ share, and the fourth firm has a 1​% market share. using the​ herfindahl-hirschman index​ (hhi), what is this​ market's level of​ concentration?

Answer 1

0.3852

Step-by-step explanation:

The​ herfindahl-hirschman index​ (hhi) is found by adding the sum of squared concentration ratios

HHI = (0.49^2) + (0.35^2) + (0.15^2) + (0.01^2)

0.2401 + 0.1225 + 0.0225 + 0.0001 = 0.3852

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