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suoתבsuzמו D Question 23 The information below sets out the estimated market shares for the cellular phone ma market Firm Market Share Nokia 34% Fujitsu 3% Kyocera 3% LG 6% Motorola 16% Samsung 6% Sanyo 4% Siemens 7% Sony Ericsson 11% Plus 10 more firms with 1 % each Based on this information, the Herfindahl-Hirschman Index is 2,216 1.272 1.698 1,836

Answer 1

Given the above information about shares of phone companies, the Herfindahl Hirschman index is calculated by squaring the market share for each firm and then summing the squares.

HHI = (34)^2 + 3^2 + 3^2 + 6^2 + 16^2 + 6^2 + 4^2 + 7^2 + 11^2 + 10(1)^2

= 1156 + 9 + 9 + 36 + 256 + 36 + 16 + 49 + 121 + 10

= 1698

HHI = 1698

Ans. (C)