If an industry has a Herfindahl Index of 2,000, the theoretical number of firms in the industry is?

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2006-10-19 16:38:01 · 2 answers · asked by Anonymous in Social Science ➔ Economics

http://en.wikipedia.org/wiki/Herfindahl_index

2006-10-19 16:45:53 · answer #1 · answered by Brian S 3 · 0⤊ 0⤋

Assuming equal market shares of all firms,

H = n * (100 / n)^2 = 10,000 / n,

so n = 10,000 / H = 10,000 / 2,000 = 5

2006-10-20 09:48:45 · answer #2 · answered by NC 7 · 0⤊ 0⤋