The Larger the Number of Firms in an Industry and the Less

question 27

True/False

The larger the number of firms in an industry and the less the extent of product differentiation, the greater will be the elasticity of the individual seller's demand curve.

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Definitions:

Per Se Violation

An action that is inherently illegal under antitrust laws, without needing to prove its harm on competition.

Price-fixing

The practice where businesses conspire to establish prices at a certain level, rather than letting them be determined by free-market forces.

Herfindahl Index

A measure of market concentration that is calculated by squaring the market share of each firm competing in a market and then summing the resulting numbers.

Economic Concentration

The degree to which a small number of firms occupy a large proportion of the market in a particular industry.