Suppose the 2- Firm Concentration Ratio (Measuring Output) in a Canadian

question 96

Multiple Choice

Suppose the 2- firm concentration ratio (measuring output) in a Canadian manufacturing industry is over 90 percent. Why might the market power of these 2 firms be less than the concentration ratio suggests?

• A) The product is traded internationally and the two Canadian firms compete with many global rivals.
• B) A 2- firm concentration ratio does not provide enough information.
• C) A high concentration ratio usually indicates low degrees of market power.
• D) The product is purely domestic and there is no international trade.
• E) The relevant market is regional and so the concentration ratio is not relevant.

---

Definitions:

Unconscionable

Referring to a contract or deal that is so unjust or overwhelmingly one-sided in favor of the party with superior bargaining power that it is deemed unenforceable under the law.

Seller's Remedies

Legal actions or steps that a seller can take if a buyer fails to fulfill their part of a purchase agreement.

Breaches

Acts of breaking laws, rules, agreements, or promises, leading to legal consequences.

Statute of Limitation

A law prescribing a period within which legal action must be taken for an alleged wrongdoing, after which the claim is no longer valid.