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Suppose two industries exist,a and b, both of which have concentration ratios of 80%

Marketing

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?

Option 1

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