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Suppose that three firms make up the entire wig manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is . A new firm, Mane Attraction, enters the wig manufacturing industry and immediately captures a 10% share of the market. This would cause the Herfindahl index for the industry to . The largest possible value of the Herfindahl index is 10,000 because: An index of 10,000 corresponds to 100 firms with a 1% market share each An index of 10,000 corresponds to a monopoly firm with 100% market share An industry with an index higher than 10,000 is automatically regulated by the Justice Department

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Suppose that three firms make up the entire wig manufacturing industry. One has a-example-1
User Marites
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