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

question 123

Multiple Choice

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

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

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Definitions:

Farmers

Individuals or entities involved in the practice of agriculture, raising living organisms for food or raw materials.

Farm Subsidies

Government payments or other support extended to farmers to supplement their income, manage the supply of agricultural commodities, and influence the cost and supply of such commodities.

Parity Concept

The idea that year after year the sale of a specific output of a farm product should enable a farmer to purchase a constant amount of nonagricultural goods and services.

Parity Concept

A principle in economics that suggests prices, incomes, or interest rates should equalize across different markets or countries, adjusted for exchange rates.