The four largest firms in an industry account for the following value of industry sales: 12 percent, 8 percent, 5 percent and 4 percent. Calculate the four-firm concentration ratio. Would this industry be regarded as competitive or concentrated?
What will be an ideal response?
The four-firm concentration ratio is 29 percent. The four-firm concentration ratio is less than 40 percent, so the industry would be regarded as competitive.
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Using the above figure, the efficient amount of paper produced is
A) 60 million tons. B) 80 million tons. C) 100 million tons. D) 120 million tons.
Because barriers to entry limit the amount of competition in various markets, government policy should be designed to reduce or eliminate such barriers wherever possible
Indicate whether the statement is true or false
Which of the following statements is true?
A) Base year prices are necessarily higher than current year prices. B) The CPI in the base year is always 100. C) If the CPI is 112 in year 1 and 123 in year 2, prices have risen by approximately 9.8 percent between the two years. D) b and c E) a, b, and c
Perfect competition is characterized by many firms and no barriers to entry.
Answer the following statement true (T) or false (F)