Using the information in the table, develop the four-firm concentration ratio. Would you classify this industry as an oligopoly? Explain your answer.
What will be an ideal response?
The four-firm concentration ratio is 93 percent (800/860 multiplied by 100). This industry would be classified as an oligopoly if we use the rule of thumb that says that an oligopoly exists when the four-firm concentration ratio is at least 75%.
You might also like to view...
Which of the following is TRUE?
A) When a market price allocates resources, everyone who is able to pay the price gets the resource. B) A command system works well when the lines of authority and responsibility are clear. C) When the government decides how to allocate tax dollars among competing uses, resources are allocated by command. D) When a manager offers everyone in the company the opportunity to win a prize, resources are allocated by a market price.
A famous opera star made $2 million per year. He said he would rather sell insurance if he couldn't make more than $100,000 per year. If he is telling the truth, how much is he being paid in economic rent?
A) $2.0 million B) $100,000 C) $1.9 million D) $2.1 million
Aggregation is important because it allows macroeconomists to divide a whole into its individual components
a. True b. False
When a nation is economically integrated with trading partners, fixed exchange rates:
A) would be very harmful to the dynamic nature of trade. B) could promote integration and economic efficiency by keeping transaction costs low. C) would be the best choice if that nation became the dominant nation in the transactions. D) would be adequate but have the disadvantage of discouraging trade because of uncertainty.