1. _________________________ is a tool used to analyze oligopolistic markets. 2.
ID: 1118679 • Letter: 1
Question
1. _________________________ is a tool used to analyze oligopolistic markets.
2. New firms will enter a monopolistically competitive market if
(marginal revenue, price) is greater than (average total cost, marginal cost).
(Circle the correct answer for each.)
3. Consider perfect competition and monopolistic competition when answering
the following questions:
State one way in which they are different.
State one way in which they are the same.
4.Consider monopoly and monopolistic competition when answering the
following questions:
State one way in which they are different.
State one way in which they are the same.
Explanation / Answer
1. Concentration ratio is a tool used to analyze oligopolistic markets.
Explanation: In simple words, concentration ratio is the ratio of the total market share of a number of top firms in a market to the size of the entire market. The higher the concentration ratio, the higher is the market power of these firms. Generally, 3-firm, 4-firm or 5-firm concentration ratio is calculated. Concentration ratios are used to evaluate the extent to which any market is oligopolistic.
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