Which of the following economic identities measures the degree of monopoly in an industry?
A. Stackelberg model
B. Concentration ratio
C. Diffusion index
D. Herfindahl index
E. Elasticity reciprocal
Choose the most appropriate answer from the options given below.

Correct option is D

Monopoly refers to a market in which a single seller sells unique product in the market. The economic identities that measure the degree of monopoly in an industry are-
 Concentration Ratio -It refers to the ratio of the part of total market sales controlled by the large sellers. The range of concentration ratio is from 0% to 100%. If the range is from 0% to 50% then it is considered as low concentration. If the range is from 50% to 100% then it is considered as high concentration and if the ratio is 100%, this indicates that the industry is a monopoly.
 Herfindahl Index: It is calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers. It is used to determine the market concentration and market competitiveness. The range of the Herfindahl index is range from 0 to 10,000.
 Elasticity reciprocal: It is the inverse formula of elasticity of demand and it is used to calculate the degree of monopoly degree.
Thus, d, b and e options are correct.
 Stackelberg Model: It is a model of an oligopoly market in which the leader firm moves first and then the follower firms move after it. In this leader, the firm dominates the market and set the price first. It is formulated by Heinrich Von Stackelberg in 1934.
This index is used for determining the strength of the stock market in the economy.