When There Are Many Buyers and Sellers of a Good

question 78

Multiple Choice

When there are many buyers and sellers of a good and the product sold is identical across firms,:

• A) the demand curve for each firm's output is somewhat elastic.
• B) the industry demand curve is somewhat elastic.
• C) the demand curve for each firm's output is perfectly inelastic.
• D) the industry demand curve is perfectly inelastic

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Definitions:

Herfindahl Index

A measure of market concentration to assess the competitive landscape, calculated by summing the squares of the market shares of all firms in the industry.

Concentration Ratio

A measure used to assess the degree of market concentration, quantifying the market share held by the largest firms within an industry.

Equal Percentage

A rate or proportion where the same fraction or share applies uniformly across different scenarios or entities.

Pure Monopoly

A market structure characterized by a single seller selling a unique product in the market, resulting in significant control over pricing and market supply.