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What is the Hirfindahl-Hirschman Index?
A: The Hirfindahl-Hirschman Index, or HHI, is the standard measure employed by economists to evaluate market concentration. The greater the level of concentration between the competitors, the higher the HHI. The HHI runs on a scale from zero (denoting extreme competitiveness) to 10,000 (denoting monopoly). The HHI is defined by squaring (multiplying by itself) the market share of every firm in a market, and after that adding up the results.
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•What categories and in what amounts should Jenny allocate her funds to reflect a balanced monthly budget? Include the main categories as well as examples of other categories.
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