Suppose That There Are Two Industries, a and B

question 3

Multiple Choice

Suppose that there are two industries, A and B. There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively. There are four firms in industry B with equal sales of $2.5 million for each firm. The four-firm concentration ratio for industry A is:

• A) 0.9.
• B) 1.0.
• C) 0.8.
• D) 0.7.

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Definitions:

Total Investment

The complete amount of money allocated for the purchase of new assets, expansion of operations, or other investments within a particular period.

Expected Rate Of Return

The projected return on an investment, considering both the probability of gains and the potential for losses, over a specific time period.

Interest Rates

The percentage charged on the total amount of borrowed money, or paid as earnings on an investment.

Future Dollars

A term referring to the anticipated value of a currency taking into account inflation or deflation over time.