An industry with 20 firms but the CR = 80% is called
“high concentration”, for a concentration ratio of 80 to 100 percent
is viewed as high concentration. Government regulators are usually most
concerned with industries falling into this category. It is a good indication
of oligopoly and that these four firms have significant market control.
Answers Needed to these:
*What are some reasons why this industry has a high CR while
the other industry has a low CR?
*IS it possible for smaller firm to thrive and profit in
such an industry? How?
*Contrast the effects efficiency if the dominating firms use
a price leadership model versus a contestable markets model.
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