If There Are Four Firms in a Market and Each

question 109

Multiple Choice

If there are four firms in a market and each has an equal market share, the Herfindahl- Hirschman Index (HHI) is_____ .

• A)1,600
• B)5,500
• C)100
• D)2,500

---

Definitions:

Transitive Preferences

A condition in decision-making where if an individual prefers option A over B, and B over C, then the individual also prefers A over C.

Condorcet

A method of decision making, named after the French mathematician Marquis de Condorcet, that identifies the option that would win a majority of votes in all possible pairings against each of the other options.

Social Choice and Individual Values

A concept in welfare economics and political science that examines how to aggregate individual preferences, values, or welfare to reach collective decisions.

Condorcet Paradox

The failure of majority rule to produce transitive preferences for society.