Answered

Discover a wealth of knowledge at Westonci.ca, where experts provide answers to your most pressing questions. Ask your questions and receive precise answers from experienced professionals across different disciplines. Explore comprehensive solutions to your questions from knowledgeable professionals across various fields on our platform.

Suppose that three firms make up the entire tire manufacturing industry. One has a 40% market share, and the other two have a 30% market share each. The Herfindahl index of this industry is . Tread Tough, one of the firms with a 30% market share in the tire manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to .

Sagot :

Answer:

3400

increase

Explanation:

the Herfindahl index is used to calculate the concentration of firms in an industry

The HHI is calculated by squaring the market share of each firm in the industry.

40² + 30² + 30² = 3400

If one of the firms leaves the industry, the industry becomes more concentrated and the HHI index would increase

We hope our answers were helpful. Return anytime for more information and answers to any other questions you may have. We hope you found this helpful. Feel free to come back anytime for more accurate answers and updated information. Get the answers you need at Westonci.ca. Stay informed with our latest expert advice.