7. The Herfindahl index Suppose that three firms make up the entire tire manufacturing industry. One has a 50% market share, and the other two have a 25% market share each. The Herfindahl index of this industry is . Tread Tough, one of the firms with a 25% market share in the tire manufacturing industry, leaves the market. This would cause the Herfindahl index for the industry to . Why is the largest possible value of the Herfindahl index is 10,000? An index of 10,000 corresponds to a monopoly firm with 100% market share. An index of 10,000 corresponds to 100 firms with a 1% market share each. An industry with an index higher than 10,000 is automatically regulated by the Justice Department