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HERFINDAHL-HIRSHMAN INDEX: 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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SURPLUS

A condition in the market in which the quantity demanded is less than the quantity supplied at the existing price. Because sellers are unable to sell as much of the good as they want, a surplus generally causes a decrease in the market price, which then acts to restore equilibrium. A surplus, which also goes by the terms excess supply and buyers' market, is one of two basic states of disequilibrium for the market. The other is shortage.

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