The Concentration and Herfindahl Indices Computed by the U

question 5

Multiple Choice

The concentration and Herfindahl indices computed by the U.S. Bureau of Census must be interpreted with caution because:

• A) they overstate the actual level of concentration in markets served by foreign firms.
• B) they understate the degree of concentration in local markets, such the gasoline market.
• C) Both they overstate the actual level of concentration in markets served by foreign firms and they understate the degree of concentration in local markets, such the gasoline market are correct.
• D) None of the statements are correct.

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Definitions:

Property, Plant, Equipment

Tangible long-term assets used in the operation of a business, such as buildings and machinery.

Automobile Dealership

A business that sells new or used cars at the retail level, typically based on a dealership contract with an automaker or sales subsidiary.

Land Improvements

Enhancements to a plot of land such as landscaping, fencing, and utilities, which increase the property's value.

Graded Land

Land that has been leveled or sloped to prepare it for construction, landscaping, or other specific purposes.