Multiple Choice
The monkey smoking a cigar industry is:
12. Monopoly
Mergers and the Herfindahl-Hirschman Index (HHI)
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The HHI for this industry is:
A
2,704
B
4,439
C
100,000
D
3,688
Verified step by step guidance1
Calculate the total market quantity by summing up the quantities supplied by all suppliers: 400 + 65 + 850 + (5 * 20).
Determine the market share for each supplier by dividing their quantity supplied by the total market quantity and then multiplying by 100 to convert it to a percentage.
Square the market share of each supplier to prepare for the Herfindahl-Hirschman Index (HHI) calculation.
Sum the squared market shares of all suppliers to find the HHI for the industry.
Compare the calculated HHI with the given options to identify the correct answer.
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