If an industry has exactly 10 firms with identical sales, the four-firm concentration ratio must be:
A. 10.
B. 60.
C. 90.
D. 40.
Answer: D
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Which of the following statements is true for both Microsoft and a locally owned restaurant?
A. Both confront perfectly elastic demand for their products. B. Both are perfect competitors. C. Both seek to maximize profits. D. Neither firm is able to influence the price of their products.
The behavior of the perfectly competitive firm
A. theoretically leads to an inefficient allocation of resources. B. maximizes the benefits to consumers, given the resources available to the economy. C. reduces output in order to raise prices in the short term. D. results in excess capacity and inefficiency.
Suppose the distribution of innate ability is distributed symmetrically throughout a population but that the wage distribution is positively skewed. What most likely explains this?
A. a decreasing Gini coefficient. B. a noncompetitive labor market C. differences in human capital accumulation. D. decreased immigration. E. a regressive tax code.
A market shortage can be defined as a situation in which the quantity supplied in a market is greater than the quantity demanded, at the given price.
a. true b. false