The Advantage of the Herfindahl Index Over the Four- and Eight-Firm

question 41

Multiple Choice

The advantage of the Herfindahl index over the four- and eight-firm concentration ratios is that it provides information

• A)on the degree to which foreign firms impact domestic competition.
• B)about the dispersion of firm size in an industry.
• C)on the degree to which marginal revenue is greater than marginal cost (for a firm).
• D)about the degree of market power in an industry.

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Definitions:

Incorporation Services

Services offered by certain companies or legal entities that assist individuals or other entities in forming a corporation.

Fixtures

Items of property that are attached to a building or land in a way that makes them a legally part of that property, such as lighting systems or cabinetry.

Par Common Stock

The nominal or face value assigned to a share of common stock in the corporate charter, which may differ from the market value.

Articles of Incorporation

A document filed with a government body to legally document the creation of a corporation, containing essential details about the new entity.