Why are economists less worried about industry concentration than they once were?
What will be an ideal response?
There are several reasons why economists are less worried about highly concentrated industries. First, the theory of contestable markets suggests that firms in highly concentrated industries can be pushed to produce efficiently under the right market conditions. Second, there are real benefits of product differentiation. Third, firms in highly concentrated industries appear to spend a great deal on research and development. Last, substantial economies of scale in some industries preclude a completely competitive structure.
You might also like to view...
Some competitive firms are willing to operate at a loss in the short run because their revenues are at least able to cover their variable costs
a. True b. False Indicate whether the statement is true or false
Systematic overestimation or underestimation of inflation will
a. occur under rational expectations but not under adaptive expectations. b. occur under adaptive expectations but not under rational expectations. c. occur under both rational and adaptive expectations. d. not occur under either rational or adaptive expectations.
Which of the following is true?
A. At the same price, demand is more elastic on the steeper demand curve. B. On a linear demand curve, the higher the price, the less elastic is demand. C. On a linear demand curve, elasticity is not constant. D. None are true.
Dumping is defined as
A) selling a good abroad at prices above the costs of the firms in the foreign countries. B) exporting goods that are of inferior quality. C) selling a good abroad at prices below its cost of production or below the price charged in the home market. D) exporting goods that are sources of pollution.