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HHI: The common abbreviation for the Herfindahl-Hirshman index (or the Herfindahl index), which is a measure of concentration of the production in an industry that's calculated as the sum of the squares of market shares for each firm. This is an alternative method of summarizing the degree to which an industry is oligopolistic and the relative concentration of market power held by the largest firms in the industry. The Herfindahl index gives a better indication of the relative market control of the largest firms than can be found with the four-firm and eight-firm concentration ratios.
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Lesson 14: Production | Unit 4: Long-Run Production
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Page: 22 of 25
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In this unit, you should have learned about:- The long run as the planning period in which all inputs, especially capital, are variable.
- How the long-run production is guided by returns to scale rather than the law of diminishing marginal returns.
- The three types of returns to scale -- increasing, decreasing, and constant.
- Why increasing returns to scale result from resource specialization, support activities, and the relation between volume and area.
- Why decreasing returns to scale result from management control and fixed external inputs.
- How constant returns to scale is the balance between increasing returns to scale and decreasing returns to scale, which gives rise to the minimum efficient scale.
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RISK NEUTRALITY A preference for risk in which a person is indifferent between guaranteed or certain income over risky income. Risk neutrality arises due to constant marginal utility of income. A risk neutral person has no preference for or against risk. This is one of three risk preferences. The other two are risk aversion and risk loving.
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ORANGE REBELOON
[What's This?]
Today, you are likely to spend a great deal of time surfing the Internet trying to buy either a computer that can play video games and burn DVDs or a black duffle bag with velcro closures. Be on the lookout for rusty deck screws.
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This isn't me! What am I?
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Lewis Carroll, the author of Alice in Wonderland, was the pseudonym of Charles Dodgson, an accomplished mathematician and economist.
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"Sometimes when you innovate, you make mistakes. It is best to admit them quickly and get on with improving your other innovations. " -- Steve Jobs, Apple Computer founder
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WAPM
Weak Axiom of Profit Maximization
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