Q40. In industries characterized by unequal market shares, is a decreasing Herfindahl index most likely to be associated with an increase or decrease in the:

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答案和详解如下：

Q40.  A  Study Session 14-61-d

The Herfindahl index measures the level of industry concentration using the sum of the squared market shares of the firms in the industry. The lower the index, the higher the industry risk; because the competitive pressure is higher and there is less likelihood of cooperation. The equivalent number of firms in the industry is the reciprocal of the Herindahl index; as the index decreases, the reciprocal will increase.

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a

b

a

thanks

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