To calculate the Herfindahl index,
a. add the market shares of all firms in an industry
b. add the market shares of any four firms in an industry and then square them
c. add the market shares of the four largest firms in an industry
d. square the market shares of all firms in an industry and then add them
e. square the market shares of the four largest firms in an industry and then add them
D
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Supply and demand is an economic tool that analyzes the total costs and benefits of alternative policies to different groups, such as producers and consumers.
a. true b. false
The Organization of Petroleum Exporting Countries (OPEC) controls about 75 percent of the world's proven oil reserves. Economists refer to OPEC as a cartel because
A) it is a group of firms that collude to restrict output to increase prices and profits. B) OPEC is a monopoly, but it is located outside of the boundaries of any one country. This is the definition of a cartel. C) this is the term economists use to describe an oligopoly that sells a standardized product, such as oil, rather than a differentiated product, such as automobiles. D) this is the term used for an oligopoly that is controlled by national governments rather than private firms.