If the number two and number three firms in an industry with 10 firms merge,what happens to that industry's concentration ratio?

A) It rises
B) It falls
C) It remains the same
D) There is not enough information to determine whether it rises,falls,or remains the same.

Question

Billy Nievas · Accepted Answer

Final Answer : A, Explanation :  The concentration ratio is a measure of the market power of the largest firms in an industry. When the second and third largest firms merge, the resulting firm will have a larger market share, which will increase the concentration ratio. Therefore, the correct answer is (A) it rises.

If the number two and number three firms in an industry with 10 firms merge,what happens to that industry's concentration ratio?

A) It rises
B) It falls
C) It remains the same
D) There is not enough information to determine whether it rises,falls,or remains the same.

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Learning Objectives

Learning Objectives

Related questions

If the number two and number three firms in an industry with 10 firms merge,what happens to that industry's concentration ratio?A) It risesB) It fallsC) It remains the sameD) There is not enough information to determine whether it rises,falls,or remains the same.

Definitions

Learning Objectives

Learning Objectives

Related questions

If the number two and number three firms in an industry with 10 firms merge,what happens to that industry's concentration ratio?

A) It rises
B) It falls
C) It remains the same
D) There is not enough information to determine whether it rises,falls,or remains the same.