Which of the Following Four-Firm Concentration Ratios Is Consistent with Monopolistic

question 121

Multiple Choice

Which of the following four-firm concentration ratios is consistent with monopolistic competition?

• A) 100 percent
• B) 75 percent
• C) 25 percent
• D) 0 percent
• E) 91 percent

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Definitions:

Break Even

It is the point at which total costs and total revenues are equal, meaning there is no profit or loss.

Operating Income

Earnings before interest and taxes (EBIT), representing a company’s profit from its core business operations.

Variable Costs

Costs that vary directly with the level of production or sales volume, such as raw materials and direct labor costs.

Fixed Costs

Costs that do not vary with the volume of output produced, such as rent, salaries, and insurance premiums.