Question

In Problem 26-14, what is the value of the Herfindahl-Hirschman index?

Short answer

the value of the Herfindahl-Hirschman index is$1525$

Step-by-step solution

Given Information

Herfindahl-Hirschman Index is a generally involved proportion of focus in an industry. It is estimated by squaring the market portion of each firm contending in the market and afterwards summarizing them.

Explanation

the bigger firm has a major share of $35\%$and the other three have a share of ten percent each.

Hence, Herfindahl-Hirschman index is

$HHI=s_1^2+s_2^2+s_3^2+.....s_{{}^n}^2$

role="math" localid="1653446888259" $$\begin{gathered} =\left({35}^2+3\times {10}^2\right)=1225+300 \\ =1525 \end{gathered}$$