One advantage of the Herfindahl index over the concentration ratio is that it: a

Marketing Jan 11, 2021

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.

Expert Solution

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.

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