When the Relevant Markets Are Local,the Concentration and HHI Based

question 36

Multiple Choice

When the relevant markets are local,the concentration and HHI based on figures for the entire United States tend to:

• A) be biased downward.
• B) be biased upward.
• C) give a more precise description of the real situation.
• D) ignore the presence of import goods.

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Definitions:

Corporate Hierarchy

A structure in corporations that defines the levels of authority, roles, and responsibilities from top management to lower-level employees.

Natural Monopoly

A natural monopoly occurs when a single firm can supply the entire market at a lower cost than could be achieved by multiple firms due to economies of scale.

Economies of Scale

The cost advantages that enterprises obtain due to their scale of operation, with cost per unit of output generally decreasing with increasing scale as fixed costs are spread out over more units of output.

Imperfect Competitors

Firms or entities in a market structure where they have some control over the price of their products, due to lack of perfect competition.