Question

What is the value of the Herfindahl-Hirschman Index for the industry in Problem 26-2?

Short answer

The formula can be used to calculate the value of HHI for the industry.

Thus,

$\mathrm{HHI}=2510$

Step-by-step solution

Given information 

The calculated numbers are as follows:

The HHI value for the industry can be calculated.

Explanation

13306-26-4P AID: $4470\mid$| 11/12/2014

RID: $3603\mid 16/12/2014$

To calculate the value of HHI for the industry, use the following formula:

$$\begin{gathered} \mathrm{HHI}={\mathrm{S}}_1^2+{\mathrm{S}}_2^2+{\mathrm{S}}_3^2+{\mathrm{S}}_4^2+{\mathrm{S}}_{\mathrm{s}}^2+{\mathrm{S}}_6^2+\dots .{\mathrm{S}}_e^2 \\ \mathrm{HHI}=3^2+{17}^2+6^2+{18}^2+{41}^2+{13}^2+1^2+1^2 \\ \mathrm{HHI}=9+289+36+324+1681+169+1+1 \\ \mathrm{HHI}=2510 \end{gathered}$$

Thus, $\mathrm{HHI}=2510$