Consider an industry that is made up of nine firms each with a market share (percent of sales) as follows:
a. Firm A: 30%
b. Firm B: 20%
c. Firms C, D, and E: 10% each
d. Firms F, G, H, and J: 5% each
What is the value of the Herfindahl-Hirschman Index?
A) 1,425
B) 1,600
C) 1,700
D) 2,600
Answer: C
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If investors can cover themselves in the forward market, they will take advantage of interest rate differentials by:
a. buying assets (lending) denominated in the high-interest rate currency, and selling assets (borrowing) in the low-interest rate currency. b. removing funds from both investments. c. turning over their investment portfolio to an expert in one of the two nations. d. selling assets denominated in high-interest rate currency and buying assets in the low-interest rate currency.
If an individual earns $1,500 a month and spends it evenly throughout the month, transaction balances will average
A) $50 per month. B) $750 per month. C) $1500 per month. D) $3000 per month.