Mergers and the Herfindahl-Hirschman Index (HHI)

Concept: Mergers and the HHI

5m

Problem: Calculate HHI in the following industries: 

One firm with 100% market share 

Two firms with 50% market share 

Four firms with market shares of 30%, 30%, 20%, and 20% 

Ten firms with 10% market share

5m

Problem: The HHI for this industry is: 

6m

Problem: The monkey smoking a cigar industry is: 


2m

Problem: The HHI for this industry is: 

2m