Let’s assume there are three ice-cream companies: Mycream, Iscream and Iceland. Mycream has a market share of 27%, Iscream a market share of 38% and Iceland a market share of 35%. Using the Herfindahl-Hirschman index (HHI) you can say that for the case above the market is …
That’s exactly right! According to the lecture and the Herfindahl-Hirschman index (HHI), this is the right calculation path: HHI : (27*27)+(38*38)+(35*35) > 1800. Therefore the market in this case is highly concentrated since the HHI calculation yields 3398
