Provide an Appropriate Response

question 89

Essay

Provide an appropriate response.
-Explain why a continuity correction factor is necessary when approximating the binomial distribution by the normal distribution. Refer to the terms "discrete" and continuous", and draw a diagram to support your answer.

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Definitions:

Four-firm Concentration Ratio

A measure that expresses the total market share held by the four largest firms within an industry.

Herfindahl Index

A calculation of how concentrated a market is, achieved by adding together the market share squares of every firm within that industry.

Market Power

The ability of a company or group of companies to manipulate prices or market conditions in their favor, often due to a lack of significant competition.

Oligopoly

A market structure dominated by a small number of large firms, leading to limited competition and potentially higher prices.