The Herfindahl Index Solves Which Problem with the N-Firm Ratio

question 29

Multiple Choice

The Herfindahl index solves which problem with the N-Firm ratio?

• A)Inaccuracy when dealing with more than 4 firms
• B)Inability to measure concentration if market shares are split evenly
• C)Inability to measure concentration across borders
• D)Invariance with changes in the size of the largest firms
• E)High variability when firm sizes are small

---

Definitions:

Crystal Ball

A forecasting and simulation software by Oracle that is used for predictive modeling, simulation, and optimization.

Critical Path

The longest sequence of activities in a project plan that must be completed on time for the project to finish by its due date.

Analytical Approach

A method of problem-solving that involves breaking down a complex issue into smaller components for easier understanding and solution formulation.

Variances

A measure of the dispersion indicating how much the values in a data set differ from the mean.