What is meant by the concentration of an industry? How is concentration measured? What are likely causes of high concentration?
What will be an ideal response?
Industry concentration means that a relatively large share of the industry's output is produced by the largest firms in the industry. It is often measured with concentration ratios. The four-firm concentration ratio is the percentage of total industry sales generated by the four largest firms in the industry. High concentration is likely to be associated with economies of scale, barriers to entry, and a history of mergers.
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If the elasticity of demand were positive what would this imply about the shape of the demandcurve? Why is it that we are unlikely to find a price elasticity of demand with a positive value?
What will be an ideal response?
Excess capacity occurs in long-run equilibrium under monopolistic competition so that: a. price is less than marginal cost
b. price exceeds minimum average cost. c. marginal revenue exceeds price. d. all of the above occur.
To “cure” their balance of payments deficits without altering exchange rates, Southeast Asian countries in 1997 were forced to create
A. more inflation. B. recessions. C. faster economic growth. D. money at an accelerated rate.
Economic analysis requires us to combine:
A. unlimited resources with limited wants. B. developed and developing nations. C. republicans and democrats. D. theory with observations.