Suppose That Total Sales in an Industry in a Particular

question 36

Multiple Choice

Suppose that total sales in an industry in a particular year are $600 million and sales by the top four sellers are $200 million,$150 million,$100 million and $50 million,respectively.We can conclude that:

• A)price leadership exists in the industry
• B)the concentration ratio is less than 80 percent
• C)the industry is an oligopoly
• D)the industry is a monopoly
• E)the industry is perfectly competitive

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Definitions:

Discretionary Spending

Expenditure over which a government or business has control and is not mandated by laws, such as research and development or advertising expenses.

Research and Development

Activities undertaken by a business to innovate and introduce new products or services, often entailing technical research and design.

Earnings Targets

Earnings Targets are specific financial goals set by a company, often related to earnings per share or net income, that it aims to achieve within a given timeframe.

Incentive Compensation Plans

Programs designed by employers to reward employees for achieving specific business goals, enhancing productivity and motivation.