The following table reports the four-firm concentration ratio for five different industries:
Refer to the table above. In which industry do the four largest firms have the most market power?
Refer to the table above. In which industry do the four largest firms have the least market power?
Homework Answers
Concentration ratio is used to show the extent of market control of the largest firms in the industry and to illustrate the degree to which an industry is oligopolistic.
Highest concentration ratio is of Industry E, 35%.
The lowest is for industry B, 1%.
Therefore,
Industry in which the four largest firms have the most market power is INDUSTRY E.
Industry in which the four largest firms have the least market power is INDUSTRY B.
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The following table reports the four-firm concentration ratio for five different industries:
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