The Larger the Herfindahl Index, the

question 176

Multiple Choice

The larger the Herfindahl index, the

• A) less the degree of import competition in an industry.
• B) greater the degree of import competition in an industry.
• C) less the degree of market power in an industry.
• D) greater the degree of market power in an industry.

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Definitions:

Production Function

Describes the relationship between inputs used in production and the resulting output, showing how factors like labor and capital are transformed into goods or services.

Output

The quantity of products or services that a business, sector, or economic system generates.

Inputs

The resources used in the production of goods and services, such as labor, raw materials, and capital.

Production Function

An equation that describes the maximum output of a firm, given the quantity of inputs it uses, illustrating the relationship between inputs and outputs.