Herfindahl index of market shares


Market shares of all eight firms in an industry are 50 percent, 20 percent, 14 percent, 6 percent, 4 percent, 3 percent, 2 percent, and 1 percent. What is the Herfindahl index?

a. 502 + 202 + 142 + 62 + 42 + 32 + 22 + 12

b. 502 + 202 + 142 + 62

c. the sum of the market shares of the four largest firms

d. 902

e. 90

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Macroeconomics: Herfindahl index of market shares
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