In a 20-Firm Industry, Two of the Smallest Firms Merge

question 124

Multiple Choice

In a 20-firm industry, two of the smallest firms merge. Yet the 4-firm concentration ratio and the 8-firm concentration ratio did not change. All things considered, we can say that the industry has

• A) moved closer to pure competition because the number of firms decreased.
• B) moved farther away from competition because the number of firms decreased.
• C) experienced no change in competition even though the number of firms decreased.
• D) to be identified first; otherwise there is no way to tell.

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Definitions:

Concept

A mental grouping of similar objects, events, ideas, or people.

Transport Vehicles

Vehicles designed for the transportation of goods or passengers.

Step-by-Step

A methodical, sequential approach to achieving a goal or completing a process.

Algorithm

A process or set of rules to be followed in calculations or other problem-solving operations, especially by a computer.