Which of the Following Four-Firm Concentration Ratios Would Be the Best

question 24

Multiple Choice

Which of the following four-firm concentration ratios would be the best indication of a perfectly competitive industry?

• A) 2 per cent
• B) 100 per cent
• C) 50 per cent
• D) 31 per cent
• E) 78 per cent

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Definitions:

Legitimate Power

Power that is based on position and mutual agreement; agent and target agree that the agent has the right to influence the target.

Mutual Agreement

A mutual agreement involves a concord or pact between two or more parties, where each party has a clear understanding and is in accord about the terms and conditions discussed.

Agent's Position

The status or role of an individual acting on behalf of another person or an entity in a particular situation.

Referent Power

A form of influence that derives from the attractiveness and charisma of the leader, where followers identify with or admire the leader.