Question
What HHI range indicates an unconcentrated market?
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Answer
Below 1,500.
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Question
How is the Herfindahl-Hirschman Index, or HHI, calculated?
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Answer
Sum the squared market shares of all firms.
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Question
Why does a high HHI often imply greater pricing power?
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Answer
Because market share is concentrated in few firms, weakening competition.
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Question
What does an N-firm concentration ratio measure in an industry?
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Answer
The combined market share of the N largest firms.
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