Answer:
many corporations are conglomerates, spanning a variety of different industries.
Step-by-step explanation:
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they measure each firm's share of sales rather than each firm's share of profits.
many corporations are conglomerates, spanning a variety of different industries.
they don't account for mergers within an industry.
they are based on market share, not market size.
The Herfindahl index and the concentration ratio are measures used to determine the concentration ratios of firms in an industry
The of concentration ratio is calculated by adding the market shares of firms in the industry. e.g. the four firm concentration ratio calculates the concentration ratio of the 4 largest firms in an industry by adding their market shares together
The HHI is calculated by squaring the market share of each firm in the industry.
Because these measures only measure the concentration of firms in a particular industry, they do not account for conglomerates that exist in different industries