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3 September, 11:19

There are 10 firms in an industry, and each firm has a market share of 10 percent. the industry's herfindahl index is

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  1. 3 September, 13:43
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    Herfindahl index is a number that allows us to determine the concentration of the firms of a certain industry in a certain location. This can be computed by squaring the market shares of each company and summing up all the squared marked shares. This is as shown below.

    square of market shares = (10^2) = 100

    Since there are 10 companies, we may multiply the calculated value by 10 to give the final answer of, 1,000.

    Answer: 1,000
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