How is market power and market concentration measured The extent or degree in which a relatively small number of firms account for a relatively large percentage of the market is known as market concentration (Business Dictionary, 2015). The Herfindahl-Hirschman Index (HHI) has been employed to measure market concentration, while it identifies how adjacent a market is to becoming a monopoly. Market concentration is uniquely calculated by the Herfindahl-Hirschman Index by means of "squaring the market share of each firm competing in a market, and then summing the resulting numbers," (Investopedia, n.d.). Therefore, these scores may range from zero (0) to ten thousand (10,000); with zero representing perfect concentration and ten thousand representing a monopoly. The U.S. Department of Justice engages the HHI to analyze any latent merger issues. Next, we will turn our attention to market power