Suppose That There Are Two Industries, a and B

question 10

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 B is:

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

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Definitions:

Price Elastic

Price elastic describes how the quantity demanded of a good or service changes in response to a change in its price.

Income Portion

The part of an individual's or household's income that is allocated for various types of spending or saving.

Close Substitutes

Goods or services that can easily replace each other in consumption due to their similar characteristics.

Families' Budgets

Financial plans created by families to manage their income, expenses, savings, and investments over a specific period.