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Homework answers / question archive / Suppose two industries exist,a and b, both of which have concentration ratios of 80%
Suppose two industries exist,a and b, both of which have concentration ratios of 80%.
In A, the four largest firms control the following shares of the market, respectively: 60%, 10%, 7%, and 3%.
In B, the four largest each have a 20% share of the market.
a. In which would you expect more potential for monopoly power?
b. What does this say about using concentration ratios as a measure of the potential for monopoly power?
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