If an Industry Is Dominated by Three Large Producers Whose

question 85

Multiple Choice

If an industry is dominated by three large producers whose revenues represent 30%,30%,and 30% of the market's total revenues with the remaining two firms each representing 5%,what would be the measure of the Herfindahl-Hirschman Index for this industry?

• A) 2,725
• B) 2,750
• C) 9,975
• D) 10,000

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Definitions:

Maximize Profit

The process of increasing one's financial gain to the highest possible level given the constraints of the market.

Productivity

The efficiency with which input resources are converted into output, often measured as the ratio of output to input over a specific period.

Marginal Revenue Product Curve

A graphical representation showing how the additional revenue of a firm changes with the employment of an extra unit of input in the production process.

Factor of Production

Resources used in the production of goods and services, typically classified into land, labor, capital, and entrepreneurship.