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.

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Definitions:

Cord-cutting Trend

The trend of consumers cancelling or forgoing traditional cable or satellite television services in favor of streaming or internet-based services.

Trade Reporters

Journalists who specialize in reporting on industry-specific news, trends, and developments, catering to professionals within those sectors.

Industry Members

Individuals or companies that are part of a specific sector of the economy, sharing common interests, goals, and standards.

Non-traditional Media Representatives

Individuals or entities that represent forms of media outside the mainstream outlets, such as bloggers, social media influencers, and podcasters.