Asked by Aneri Patel on May 14, 2024
Verified
Concentration ratios measure the
A) geographic location of the largest corporations in each industry.
B) degree to which product price exceeds marginal cost in various industries.
C) percentage of total industry sales accounted for by the largest firms in the industry.
D) number of firms in an industry.
Concentration Ratios
Measures of market structure and competition which indicate the cumulative market share of the top firms in an industry.
Geographic Location
Geographic Location denotes the specific physical position of an entity on Earth's surface, influencing its economic activities.
Marginal Cost
The rise in complete costs associated with creating one more unit of a good or service.
- Gain insight into how concentration ratios and the Herfindahl index are used to quantify market concentration.
Verified Answer
IZ
Isabella ZunigaMay 17, 2024
Final Answer :
C
Explanation :
Concentration ratios are used to assess the market power of the largest firms in an industry by measuring the percentage of total industry sales they account for. This helps in understanding the level of competition within the industry.
Learning Objectives
- Gain insight into how concentration ratios and the Herfindahl index are used to quantify market concentration.