Save Question 63 (2 points) The concentration ratio provides a measure of the ex

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Save Question 63 (2 points) The concentration ratio provides a measure of the extent to which an industry produces a useful product. is dominated by a small number of firms is earning economic profits. is earning accounting profits. Save Question 64 (2 points) A cartel is an organization of frms dominated by one firm, which is usually referred to as the price leader that attempts to increase total (or industry) demand for their product that reduces output and increases price in an effort to increase joint profits that deliberately attempts to disrupt the market for political reasons.

Explanation / Answer

63. is dominated by small number of firms.

64. that reduce output and increases price in an effort to increase joint profits.

Cartels: It refers to collective decision making by a group of firms with a view to avoiding competition and securing monopoly control of the market. Competing firms may reach a board agreement on the pricing and output policy so that competition is avoided and a sort of joint monopoly structure of the market emerges.

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