Discuss the advantages of the Herfindahl-Hirschman Index compared with the four-firm concentration ratio

Unlike the four-firm concentration ratio, HHI takes into account data on a much larger percentage of the firms in the market than just the top four. HHI calculation automatically magnifies the weight assigned to the market shares of the larger firms, because the square of a larger number is disproportionately larger than the square of a smaller number. This effect is considered desirable, because these larger firms are the reason the government worries about monopoly power in the market under consideration. It also explains why the HHI works as a measure of concentration. The HHI number rises when concentration grows.

Economics

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The change in the economic welfare of a country associated with an increase in a tariff equals

A) efficiency loss - terms of trade gain. B) efficiency gain - terms of trade loss. C) efficiency loss + tax revenue gain. D) efficiency loss + tax revenue gain + terms of trade gain. E) efficiency loss - tax revenue gain.

Economics

It has been generally observed that most trade in the world occurs between a developed and a less-developed nation rather than between industrial or developed nations

a. True b. False Indicate whether the statement is true or false

Economics