Market concentration ratios also give some guidance to existing brands as well. High concentration ratios suggest that the marketplace has an oligopoly structure, which generally leads to less direct competitive behavior, as it is usually not in the interests of the competitors overall. Whereas low concentration ratios suggest the advantages of product differentiation and even potential mergers and acquisitions. If the market structure is monopolistic competition, would business prefer high or low market concentration to maximize profit? Why.

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In a monopolistic competition market structure businesses would generally prefer low market concentr... View the full answer