Concentration ratios a)Do not exist in perfect competition b)Ignores potential entrants c)Usually increase when two or more firms merge d)All of the above

Marketing Jan 14, 2021

Concentration ratios

a)Do not exist in perfect competition

b)Ignores potential entrants

c)Usually increase when two or more firms merge

d)All of the above

Expert Solution

D. All of the above

Concentration ratio ranges between 0% to 50% for the perfectly competitive firms. On the other hand Conscentration ratio is 100% for a pure monopoly. Also the concentration ratio ignores the new and potential competitions and when two or more firms merge the concentration ratio increases, as the competition in the market reduces. Hence all of the above is correct.

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