Question

In the market for bottled water, fresh springs has a 30 percent share of the market, swiss springs has a 27 percent share, l'eau de france has a 13 percent share, and mountain water has a 10 percent share. the rest of the market consists of 20 firms with a 1 percent share of the market each. what is the value of the herfindahl-hirschman index

Answer 1

The value of the Herfindahl-Hirschman Index, calculated for the market for bottled water, is 2,298.

What is the Herfindahl–Hirschman Index?

The Herfindahl–Hirschman Index, HHI, is a commonly accepted measure of market concentration and competitiveness.

The HHI is calculated by squaring the market share of each competing firm and then summing the resulting numbers.

Data and Calculations:

Product           Market Share     Squared Market Share

Fresh springs         30%                    900(30% x 30%)

Swiss springs         27%                    729 (27% x 27%)

L'eau de France      13%                    169 (13% x 13%)

Mountain water      10%                    100 (10% x 10%)

Rest of market       20%                   400 (20% x 20%)

Sum of squared market share =    2,298

Thus, the value of the Herfindahl-Hirschman Index is 2,298, reflecting a low market concentration.

Learn more about the Herfindahl-Hirschman Index at Herfindahl-Hirschman Index at https://brainly.com/question/17180005

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