Assume Six Firms Comprising an Industry Have Market Shares of 30,30,10,10,10,and

question 9

Multiple Choice

Assume six firms comprising an industry have market shares of 30,30,10,10,10,and 10 percent.The Herfindahl-Hirschman Index for this industry is ________.

• A)80
• B)2,200
• C)1,600
• D)2000

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Definitions:

Break-Even Price

The price point at which total revenues equal total costs, resulting in no profit or loss for the business, used as a measure of financial sustainability.

Variable Costs

Expenses that vary in relation to a company's production volume or operational activities.

Lawn-Mowing Service

A business that provides the service of cutting the grass on residential or commercial properties.

Optimal Output

The level of production that maximizes a firm's profit, or the most efficient allocation of resources in producing a good or service.