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hello in this video weamp;#39;re going to calculate the herfindahl hirschmann index or the hhi for short uh using excel so what this is is a way to tell how much concentration there is in the market concentration meaning uh less competitiveness so the formula for this is youamp;#39;re gonna add up the squares of all of the market share so in this particular problem you just square this square this square this really would be over here so square this square this square this square this and square this so theoretically if you had a monopoly like a total monopoly then one firm would have a hundred percent market share a hundred times a hundred is ten thousand so the most concentrated you could have would be uh if one single firm sold a hundred percent of the market share then you have a number of ten thousand um department of justice uh likes to reduce this to reject mergers around six thousand might use it a little bit less depending on the circumstances they might allow one with a lit
