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Homework answers / question archive / One advantage of the Herfindahl index over the concentration ratio is that it: a
One advantage of the Herfindahl index over the concentration ratio is that it:
a. tells about only the top 50 firms in an industry.
b. takes into account only the leading firms in an industry.
c. is easier to calculate.
d. gives extra weight to firms that are especially large.
The correct option is:
d. gives extra weight to firms that are especially large.
The advantage of HHI over the concentration ratio is that it takes into account the relative size of the firm and gives more weightage to the larger firms in the industry.
