What Would the Herfindahl-Hirschman Index Equal for an Industry Consisting

question 101

Multiple Choice

What would the Herfindahl-Hirschman Index equal for an industry consisting of six firms with market shares of 40%, 30%, 20%, 5%, 3%, and 2%?

• A)0.95 
• B)2.934 
• C)2,938 
• D)10,000

---

Definitions:

Economist

A professional who studies the production, distribution, and consumption of goods and services, focusing on how economic agents behave and interact.

Government Intervention

Government intervention involves actions taken by a government to affect the economy, which can include regulations, subsidies, tariffs, and monetary policies.

Externality

A consequence of an economic activity that is experienced by unrelated third parties; it can be either positive or negative.

Efficient Allocation

An optimal distribution of resources in an economy where it is not possible to make someone better off without making someone else worse off.