Which of the Following Statements Is True About Concentrated Industries

question 50

Multiple Choice

Which of the following statements is true about concentrated industries?

• A)These industries have few competitors and rivalry is less intense.
• B)Smaller competitors usually respond aggressively to actions taken by large firms.
• C)Few large competitors are aware of each other's presence and therefore more likely to create conflict.
• D)If firms are approximately the same size, they tend to be able to respond, or retaliate, strongly to moves by rival firms.

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Definitions:

Monopoly Price

The price set by a monopoly, typically higher than in competitive markets, due to the absence of competition.

Economic Profits

Profits exceeding the opportunity costs of all resources used, indicating a return above the normal competition level.

Marginal Revenue

The additional income earned by producing and selling one more unit of a product.

Marginal Costs

The additional cost incurred in producing one more unit of a good or service.