The Herfindahl-Hirschman Index Is Calculated as

question 92

Multiple Choice

The Herfindahl-Hirschman Index is calculated as

• A)the cube of the percentage market share of each firm summed over the largest 100 firms.
• B)the square of the percentage market share of each firm summed over the largest 50 firms or summed over all the firms if there are fewer than 50.
• C)the square of the percentage market share of each firm summed over the largest 20 firms.
• D)double the market share of the five largest firms.
• E)none of the above

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Definitions:

Tangent

A straight line that touches a curve at a single point without crossing it, often used to find the slope of the curve at that point.

Substitution Effect

The change in the quantity demanded of a good that results from a change in price, making the good more or less expensive relative to other goods.

Wage Increase

An upward adjustment in the amount of money that workers are paid per hour, day, or work performed.

Labor Supply

The total hours that workers wish to work at a given wage rate.