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1 July, 22:31

What is the HHI for the following industry?

a. Firm 1 has a market share of 20%

b. Firm 2 has a market share of 20%

c. Firm 3 has a market share of 20%

d. Firm 4 has a market share of 10%

e. Firm 5 has a market share of 10%

f. Firm 6 has a market share of 10%

g. Firm 7 has a market share of 5%

h. Firm 8 has a market share of 5%

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Answers (1)
  1. 1 July, 23:15
    0
    HHI = 1550

    Explanation:

    Herfindahl-Hirschman Index (HHI) is a popular measure of the concentration of the market and it is used to ascertain market competitiveness, usually pre - and post-Mergers and acquisitions (M&A) transactions. HHI is measured by summing the square of the idividual market share of firm competing in a market ad It has a range from close to 0 to 10,000.

    HHI = 20² + 20² + 20² + 10² + 10² + 10² + 5² + 5²

    =1550
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Home » Business » What is the HHI for the following industry? a. Firm 1 has a market share of 20% b. Firm 2 has a market share of 20% c. Firm 3 has a market share of 20% d. Firm 4 has a market share of 10% e. Firm 5 has a market share of 10% f.
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