### The HHI as a function of the weighted average of the firms’ price-cost margins and the market demand elasticity

HHI = ∑ Si. Si as it equals the sum of the squared market shares of each firm in the industry. (See Friday, March 10, 2006) = -ε. (∑ Si. Si )/(-ε) (multiply and divide with -ε) = -ε.∑Si.L, where L is the Lerner Index of market power in an oligopoly environment

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