There Are 30 Firms in an Industry

question 54

Multiple Choice

There are 30 firms in an industry. What happens to that industry's four-firm concentration when the third- and fourth-largest firms merge?

• A) Nothing, because their shares are already included in the concentration calculation.
• B) The industry's concentration ratio will fall.
• C) The industry's concentration ratio will increase.
• D) It is impossible to know without more information.

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Definitions:

Vendor Hosts

Providers or businesses that offer services or space on their servers for clients or customers to use for their websites or software.

Network

A connecting system (wireline or wireless) that enables multiple computers to share resources.

ASP

Stands for Application Service Provider, a business providing computer-based services to customers over a network, such as access to a particular software application using a standard protocol.

ERP

Enterprise Resource Planning, an integrated management software that allows an organization to use a system of integrated applications to manage the business and automate many back office functions.