in the market. A result of 1 would indicate a pure monopoly, and will decrease with the number of active firms in the market, and nonincreasing in the degree of symmetry between them. This measure of concentration ignores the dispersion among the firms' shares. This measure is practically useful only if a sample of firms' market shares is believed to be random, rather than determined by the firms' inherent characteristics. Any criterion that can be used to compare or rank distributions (e.g. probability distribution, frequency distribution or size distribution) can be used as a market concentration criterion. Examples are stochastic dominance and Gini coefficient. Herfindahl–Hirschman Index The most commonly used market concentration measure is the Herfindahl–Hirschman Index (HHI or H). Where is the market share of firm i, conventionally expressed as a percentage, and N is the number of firms in the relevant market. HHI can range from 10000/N to 10000. In most markets, an HHI below 1500 indicates a market with low concentration. An HHI of 5000 indicates a market where one firm has at least 50% market share, and an HHI of 10000 indicates a fully monopolised market. If market shares are expressed as decimals, an HHI of 0 represents a perfectly competitive industry while an HHI index of 1 represents a monopolised industry. Regardless whether the decimal or percentage HHI is used, a higher HHI indicates higher concentration within a market. Section 1 of the Department of Justice and the Federal Trade Commission's Horizontal Merger Guidelines is entitled "Market Definition, Measurement and Concentration" and states that the Herfindahl index is the measure of concentration that these Guidelines will use. Concentration Ratio Another common measure is the concentration ratio (CR). This ratio simply measures the concentration of the largest firms in the form where N is usually between 3 and 5. Although CR can provide a quick insight into the overall market concentration, it is limited in providing an accurate representation of industry competition, as this ratio does not provide a measure for the concentration within the top n, as a merger between two firms would not increase the overall CR, but would increase overall market concentration using other measures. As a rule of thumb, when using n=5 anything over 0.6 or 60% is considered an oligopoly, whereas when N=5, anything under 0.5 or 50% can be considered competitive and lowly concentrated. Regulatory Usage Historical Usage Since the