If There Are Five Firms in an Industry, Each with a Market

question 132

Multiple Choice

If there are five firms in an industry, each with a market share of 20 percent, the Herfindahl-Hirschman Index (HHI) of concentration is

• A) 2000.
• B) 400.
• C) 100.
• D) 20.

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Definitions:

Normal Model

A statistical model that assumes the dataset follows a normal distribution, often used in various statistical analyses.

Probability

Probability is a measure of the likelihood that a particular event will occur, expressed as a number between 0 and 1, where 0 indicates impossibility and 1 indicates certainty.

Poisson Approximation

A mathematical method for estimating the likelihood of a certain number of occurrences taking place within a set time period.

Uniform Density

A type of distribution in which all outcomes are equally likely within a specified range, characterized by a constant probability density function.