According to the contestable market model, the higher an industry's concentration ratio, the more profitable the industry.
Answer the following statement true (T) or false (F)
False
An industry may be highly concentrated, but if there are few barriers to entry, the firms in the industry may hold price down to discourage entry by other firms.
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Risk averse people
A) will never hold bonds denominated in several different currencies because of transaction costs. B) will always hold bonds denominated in several different currencies because of transaction costs. C) may hold bonds denominated in several different currencies. D) may hold bonds denominated in several different currencies only if satisfying the well known interest party condition. E) will hold only domestic bonds because of the home bias effect.
According to Ricardian Equivalence theory, a tax cut ________
A) will tend to have little economic effect B) will tend to reduce the magnitude of the trade-off between inflation and the rate of unemployment C) can be an effective policy tool in the midst of an economic downturn D) must be used in conjunction with money supply changes over the course of the business cycle
In economics, the term "surplus" means an excess quantity supplied
a. True b. False Indicate whether the statement is true or false
People who apply for loans know more about their ability to repay the loan than the lenders do. This is an example of:
A. asymmetric information. B. public information. C. a negative externality. D. a community rating.