Answer;
In a pure monopoly the HHI is 10,000.
That is, if one largest firm has 100% of the market share for the case of a pure monopoly , then HHI will be; 100 ² = 10,000
Explanation;
The Herfindahl-Hirschman index is a common measure of market concentration that is used to determine market competitiveness, often pre and post M & A transactions. Calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers.
A pure monopoly is where a single firm is producing a product or a service for which there are no close substitutes.
