As a Measure of Competition in an Industry, Concentration Ratios

question 148

Multiple Choice

As a measure of competition in an industry, concentration ratios have several flaws.One of these flaws is that concentration ratios

• A)assume that all industries have low barriers to entry.
• B)assume that a ratio less than 40 percent means an industry is perfectly competitive.
• C)assume there are only four firms in an industry.
• D)are calculated for the national market, even though competition in some industries is mainly local.