The Concentration and Herfindahl Indices Computed by the U

Multiple Choice

The concentration and Herfindahl indices computed by the U.S. Bureau of Census must be interpreted with caution because:

A) they overstate the actual level of concentration in markets served by foreign firms.
B) they understate the degree of concentration in local markets, such the gasoline market.
C) Both they overstate the actual level of concentration in markets served by foreign firms and they understate the degree of concentration in local markets, such the gasoline market are correct.
D) None of the statements are correct.