Asked by
Samantha Allen
on Nov 26, 2024
Verified
Suppose the Herfindahl indexes for industries A, B, and C are 672, 450, and 875 respectively. These data imply that
A) market power is greatest in industry A.
B) market power is greatest in industry B.
C) market power is greatest in industry C.
D) industry B is more monopolistic than industry A.
Market Power
The ability of a firm or group of firms to control prices and total market output, often as a result of monopoly or oligopoly market structures.
- Examine the importance of the Herfindahl index and concentration ratios in assessing market power and competitive dynamics.
- Distinguish the various market structures through the analysis of concentration metrics and profit margins.
Verified Answer
DS
Learning Objectives
- Examine the importance of the Herfindahl index and concentration ratios in assessing market power and competitive dynamics.
- Distinguish the various market structures through the analysis of concentration metrics and profit margins.
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