An Industry with a High Concentration Ratio Might Still Be

question 182

Multiple Choice

An industry with a high concentration ratio might still be competitive if

• A) there are no close substitutes for its product.
• B) its barriers to entry are low.
• C) its production is geographically concentrated.
• D) it has a high ratio of value added to sales.

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Definitions:

Economic Order Point

The ideal quantity of inventory a company should order to minimize costs, including holding and shortage costs.

Credit Period

The duration during which a buyer can pay for goods or services received without incurring interest charges, often used in trade credit arrangements.

Perishable Items

Goods that have a limited shelf life and require quick sale to avoid spoilage, such as food and flowers.

Low Markups

Refers to the small difference between the cost of goods and their selling price, typically indicating a low profit margin.