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    Herfindahl-Hirschman Index

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    These top firms in industry A have market shares of 30, 25, 10 and 5% respectively. The top four firms in industry B have market shares of 15, 12, 8 and 4 % respectively.

    To find the four firm concentration ratio, you will add the market shares of the four largest firms in each industry.

    For Industry A:

    30% + 25% + 10% + 5% =70%

    For Industry B :

    15% + 12% + 8% + 4% = 39%

    Industry A is more concentrated because more of the total market share is found in the top four firms.

    ****Calculate the Herfindahl - Hirschman Index for each industry.*****

    © BrainMass Inc. brainmass.com October 1, 2020, 10:55 pm ad1c9bdddf

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