The Herfindahl-Hirschman Index (HHI), a commonly used measure of competition between companies in a particular market, ranges from a score...

Let's begin by understanding the meaning of this sentence. We'll use our understanding of pause points and segment the sentence as shown - understanding and assimilating the meaning of each segment bit by bit!

Sentence Structure

• The Herfindahl-Hirschman Index (HHI),
  • a commonly used measure of competition
    • between companies in a particular market,
  • ranges from a score of zero to 10,000 points.
• Compared with that of a highly concentrated market—
  • that is,
  • a market controlled by very few companies—
  • [?] will be much lower.
• Where [?] represents what varies:
  • A. a market that is less concentrated / will have a much lower HHI score
  • B. the HHI score of a less concentrated market
  • C. when a market is less concentrated, / its HHI score
  • D. a less concentrated market / will have an HHI score that is much lower

Understanding the Meaning

Let's start from the beginning:

• The first sentence tells us about the HHI:
  • It's a commonly used measure of competition between companies
  • It ranges from a score of 0 to 10,000 points

Now the second sentence starts making a comparison:

• 'Compared with that of a highly concentrated market—'

Here's the key question: what does 'that' refer to?

• 'That' is pointing back to something from the first sentence
  • Given the structure 'that of a highly concentrated market,'
  • we're talking about something that belongs to or is associated with a market
• Looking back, the only thing discussed is the HHI score itself
  • So 'that' = 'the HHI score'
  • 'That of a highly concentrated market' = 'the HHI score of a highly concentrated market'

Now here's where we need to fill in the blank. The sentence reads:

• 'Compared with that [the HHI score] of a highly concentrated market... [BLANK]'

Let's look at our choices:

• A and D start with 'a market'
• B starts with 'the HHI score'
• C starts with 'when a market'

What do we notice about the structure here?

• This is a comparison: we're comparing the HHI score of one type of market with the HHI score of another type of market
• For proper parallel structure, we need to compare like with like:
  • Compared with [the HHI score] of a highly concentrated market,
  • [the HHI score] of a less concentrated market will be much lower
• We can't compare:
  • the HHI score of X with the market Y (that's comparing a score with a market)
• We must compare:
  • the HHI score of X with the HHI score of Y

So we need Choice B: 'the HHI score of a less concentrated market will be much lower.'

This maintains the parallel structure of the comparison—both sides are HHI scores.

The phrase set off by dashes—'that is, a market controlled by very few companies'—is just clarifying what 'highly concentrated market' means, but doesn't change the core comparison structure.

GRAMMAR CONCEPT APPLIED

Parallel Structure in Comparisons with Pronoun References

When you make a comparison using "compared with," the elements being compared must have the same grammatical structure. This is especially important when pronouns like "that" are involved.

Understanding the pattern:

• "That of X" is a shortened way of saying "the [thing just mentioned] of X"
• So if the first sentence discusses HHI scores, "that of a highly concentrated market" means "the HHI score of a highly concentrated market"

The parallel structure rule:

• Compared with [PROPERTY] of [X], [SAME PROPERTY] of [Y]

Examples:

Correct parallel structure:

• Compared with the population of California, the population of Rhode Island is much smaller.
• Compared with that [the population] of California, the population of Rhode Island is much smaller.

Incorrect—not parallel:

• Compared with the population of California, Rhode Island is much smaller. (This compares a population with a state)

How it applies to this question:

• Compared with that [the HHI score] of a highly concentrated market, the HHI score of a less concentrated market will be much lower.
• NOT: Compared with that [the HHI score] of a highly concentrated market, a less concentrated market will be much lower.

The key is recognizing what "that" refers to, then maintaining that same structure on both sides of the comparison.