Asked by
Shelly Smith
on Nov 30, 2024Verified
Which of the following is a shortcoming of concentration ratios?
A) The measurement generally does not include foreign imports.
B) The measurement is based on all firms of the industry,no matter how small.
C) The measurement is only based on the top ten firms in an industry.
D) The measurement includes foreign imports.
Concentration Ratios
Measures that indicate the extent of market control by the largest firms within an industry, used to assess competitiveness.
Foreign Imports
Goods and services brought into one country from another for sale, which can impact the domestic economy in terms of production, employment, and price levels.
Top Ten Firms
The largest ten companies in a given industry or market based on criteria such as revenue, market capitalization, or number of employees.
- Understand the significance and limitations of concentration ratios and the Herfindahl-Hirschman index in measuring market competition.
Verified Answer
YG
Learning Objectives
- Understand the significance and limitations of concentration ratios and the Herfindahl-Hirschman index in measuring market competition.