Suppose an industry has 4 firms each with 20% of sales, and 4 firms each with 5% of sales

Marketing Jan 11, 2021

Suppose an industry has 4 firms each with 20% of sales, and 4 firms each with 5% of sales. The HHI for the industry is _____.

Expert Solution

An industry has 4 firms each with 20% of sales, and 4 firms each with 5% of sales. The HHI for the industry is 1700. This reflects a moderate level of concentration.

It is calculated by adding the market share in percentage terms of all firms after they are squared.

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