Suppose an industry has 8 firms each with 9% of sales, and 4 firms each with 7% of sales. The HHI for this industry is:

A) 100

B) 844

C) 5968

D) 8496

E) None of these

Question

Zachery

Business

26 September, 13:31

Suppose an industry has 8 firms each with 9% of sales, and 4 firms each with 7% of sales. The HHI for this industry is:

A) 100

B) 844

C) 5968

D) 8496

E) None of these

+3

Answers (1)

Know the Answer?

Tater Tot · Answer 1

B) 844

Explanation:

The HHI is a formula to find the market concentration of the firms in a particular market. In order to find the HHI we square the shares of each firm in the market and sum them up So the formula becomes

(S1) ^2 + (S2) ^2 ... (SN) ^2

In this question we have 8 firms with 9% share and 4 firms with 7% share so we will put these market shares in the formula

8 * (9^2) + 4 * (7^2) = 844

Suppose an industry has 8 firms each with 9% of sales, and 4 firms each with 7% of sales. The HHI for this industry is:A) 100B) 844C) 5968D) 8496E) None of these

Suppose an industry has 8 firms each with 9% of sales, and 4 firms each with 7% of sales. The HHI for this industry is:

A) 100

B) 844

C) 5968

D) 8496

E) None of these