Explanation
Correct answer: B.
Choice B is the best answer. The convention being tested is subject-modifier placement. This choice makes the noun phrase "the HHI...market" the subject of the sentence and places it immediately after the modifying phrase "compared...market." In doing so, this choice clearly establishes that the HHI score of a less concentrated market—and not another noun in the sentence—is being compared with the HHI score of a highly concentrated market.
Why the other choices are wrong
Choice A
Choice A is incorrect because it results in a dangling modifier. The placement of "a market that is less concentrated" immediately after the modifying phrase illogically suggests that a market is being compared with an HHI score.
Choice C
Choice C is incorrect because it results in a confusing, illogical sentence. The placement of the modifier "when a market is less concentrated" after "a highly concentrated market" is contradictory. Furthermore, it’s ambiguous what "its" is referring to in "its HHI score," resulting in an illogical comparison.
Choice D
Choice D is incorrect because it results in a dangling modifier. The placement of "a less concentrated market" immediately after the modifying phrase illogically suggests that a market is being compared with an HHI score.