One measure of the extent of competition in an industry is the concentration ratio. What level of concentration indicates that an industry is an oligopoly? Most economists believe that a four-firm concentration ratio of greater than 40 percent indicates that an industry is an oligopoly. (Enter your response as an integer.) Is the concentration ratio an accurate measure of the extent of competition? The four-firm concentration ratio OA. is flawed in that it is calculated for local markets even though competition in some industries is national. ○ B. is accurate because it is based on national and global competition. ○ C. is flawed in that it includes sales in the U.S. by foreign firms. D. is accurate because it is based on estimates from the U.S. Census Bureau. E. is flawed in that it does not measure competition between industries.
One measure of the extent of competition in an industry is the concentration ratio. What level of concentration indicates that an industry is an oligopoly? Most economists believe that a four-firm concentration ratio of greater than 40 percent indicates that an industry is an oligopoly. (Enter your response as an integer.) Is the concentration ratio an accurate measure of the extent of competition? The four-firm concentration ratio OA. is flawed in that it is calculated for local markets even though competition in some industries is national. ○ B. is accurate because it is based on national and global competition. ○ C. is flawed in that it includes sales in the U.S. by foreign firms. D. is accurate because it is based on estimates from the U.S. Census Bureau. E. is flawed in that it does not measure competition between industries.
Chapter1: Making Economics Decisions
Section: Chapter Questions
Problem 1QTC
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Transcribed Image Text:One measure of the extent of competition in an industry is the concentration ratio. What level of concentration indicates that an industry is
an oligopoly?
Most economists believe that a four-firm concentration ratio of greater than 40 percent indicates that an industry is an oligopoly. (Enter your
response as an integer.)
Is the concentration ratio an accurate measure of the extent of competition?
The four-firm concentration ratio
OA. is flawed in that it is calculated for local markets even though competition in some industries is national.
○ B. is accurate because it is based on national and global competition.
○ C. is flawed in that it includes sales in the U.S. by foreign firms.
D. is accurate because it is based on estimates from the U.S. Census Bureau.
E. is flawed in that it does not measure competition between industries.
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