If There Are Only Three Firms in an Industry with 50

question 30

Multiple Choice

If there are only three firms in an industry with 50 percent, 40 percent, and 10 percent of the market, respectively, the Herfindahl Index is

• A)40
• B)100
• C)200
• D)33
• E)4, 200

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Definitions:

Non-Interest-Bearing Note

A debt instrument that does not accrue interest over time, meaning the borrower repays only the original amount borrowed.

Discount Rate

An interest rate that the Federal Reserve charges banks for short-term loans, influencing economic activity by setting the cost of borrowing money.

Cash Discounts

A reduction in the invoice price offered by sellers to buyers for prompt payment of their bill.

Interest Days

The number of days over which interest is calculated on a loan or investment.