The Largest Value the Herfindahl Index Can Have Is

question 165

Multiple Choice

The largest value the Herfindahl index can have is

• A)100, which would indicate a monopoly
• B)100 for firms equal in size
• C)100, 000
• D)10, 000, which would indicate a pure monopoly
• E)infinity

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Definitions:

Variable Expenses

Costs that vary directly with the level of activity or production output, such as raw materials and direct labor.

Break-even Point

The point at which total costs and total revenues are equal, meaning there is no profit or loss.

Variable Expenses

Costs that vary directly with levels of production or sales volume, such as materials and labor.

Fixed Expenses

Recurring costs that do not vary with the volume of production or sales, similar to fixed costs.