Which of the Following Statements About the Herfindahl-Hirschman Index Is

question 259

Multiple Choice

Which of the following statements about the Herfindahl-Hirschman Index is CORRECT? I. It is 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) in a market.
II) A small index is indicative of a high degree of competition.
III) The index is used to measure the degree of competition.

• A) I only
• B) I, II only
• C) I, III only
• D) I, II, and III

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Definitions:

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