Consider an Industry That Is Made Up of Nine Firms

question 267

Multiple Choice

Consider an industry that is made up of nine firms, each with a market share (per cent of sales) as follows:
a.Firm A: 30%
b.Firm B: 20%
c.Firms C, D and E: 10% each
d.Firms F, G, H and J: 5% each
What is the value of the four-firm concentration ratio and how is the industry categorised?

• A)50%; monopolistic competition
• B)70%; oligopoly
• C)75%; oligopoly
• D)80%; strongly oligopolistic

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Definitions:

Medium of Exchange

A mediating tool or mechanism that enables the buying, selling, or exchanging of products among individuals or groups.

Standard of Deferred Payment

A function of money that allows for goods and services to be paid for at a future date.

M1

Refers to a category of the money supply that includes all physical money, such as coins and currency, as well as demand deposits, checking accounts, and negotiable order of withdrawal (NOW) accounts.

Passbook Savings Account

A type of savings account where transactions are recorded in a physical booklet, allowing depositors to track account activity manually.