In General, the Higher the Concentration Ratio in an Industry

question 151

Multiple Choice

In general, the higher the concentration ratio in an industry, the:

• A) greater the ratio of MC to ATC.
• B) lower the ratio of MC to ATC.
• C) less firms need to pay attention to individual rivals.
• D) more firms need to pay attention to individual rivals.

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Definitions:

Equilibrium Price

The price at which the quantity of a product offered for sale equals the quantity that consumers are willing to buy.

Price Support Program

Government interventions to maintain the market price of a commodity or product above its equilibrium level.

Private Buyers

Individuals or entities that purchase goods or services for personal use or for a private collection, not for resale or commercial purposes.

Parity Ratio

A measure used to compare the price or value of one thing to another, often in agriculture to compare prices of farm products to other goods and services over time.