An Externality

question 30

Multiple Choice

An externality:

• A) is the outcome of a market transaction
• B) is the outcome of a government transaction
• C) always causes damage
• D) should be immediately regulated

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Definitions:

Four Firm Concentration Ratio

A metric assessing the total market share controlled by the four largest firms within a specific industry, used to evaluate market competitiveness.

Herfindahl-Hirschman Index

A measure of market concentration to assess the level of competition among firms within an industry.

Market Share Percentages

The proportion of sales in the total market sold by one company, expressed as a percentage.

Celler-Kefauver Act

A United States antitrust law passed in 1950, designed to prevent anti-competitive mergers and acquisitions that could create monopolies or reduce competition.