Calculate the H index when there are two hospitals with 40 percent market shares

Question

Calculate the H index when there are two hospitals with 40 percent market shares and there are four hospitals with 5 percent market shares.

a.0.29 (or H index of 2,900) b.0.31 (or H index of 3,100) c.0.33 (or H index of 3,300) d.0.35 (or H index of 3,500)

When considering your calculated H index in the previous question, which of the following descriptions about the market structure is most correct?

Extremely concentrated.

Not competitive at all.

Monopoly

Oligopoly

Extremely concentrated.

Not competitive at all.

Monopoly

Oligopoly

Explanation / Answer

HHI=40^2+40^2+5^2+5^2+5^2+5^2=3300 so C is answer

Extremely concentrated as 3300 >1800 which means higly concentration

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