Consider the Following Characteristics of a Particular Industry

question 94

Multiple Choice

Consider the following characteristics of a particular industry:
- the four- firm concentration ratio is 78 percent (in the relevant market)
- each firm produces output where P > MC
- firms advertise their product This industry is likely to be

• A) monopolistic.
• B) a cartel.
• C) perfectly competitive.
• D) one where each firm has limited market power.
• E) an oligopoly.

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Definitions:

Macroeconomic Equilibrium

Occurs when aggregate demand equals aggregate supply in an economy, resulting in stable prices, full employment, and balanced economic growth.

Quantity Demanded

The total amount of a good or service that consumers are willing and able to purchase at a given price level in a given period.

Quantity Supplied

The total amount of a specific good or service that producers are willing and able to sell at a given price over a certain period of time.

Real Gross Domestic Product

Real Gross Domestic Product (Real GDP) measures the value of all goods and services produced by an economy over a specific period, adjusted for inflation, reflecting the actual growth in economic output.