Question: Concentration ratios have often been used to note the tightness of an oligopoly market. A high concentration ratio indicates a tight oligopoly market, and a

Concentration ratios have often been used to note the tightness of an oligopoly market. A high concentration ratio indicates a tight oligopoly market, and a low concentration ratio indicates a loose oligopoly market. Would you expect firms in tight markets to reap higher profits, on average, than firms in loose markets? Would it matter if the markets were contestable? Explain your answers.

Step by Step Solution

★★★★★

3.41 Rating (160 Votes )

There are 3 Steps involved in it

1 Expert Approved Answer

Step: 1 Unlock

One would expect firms in tight markets to reap higher profits on averag... View full answer

Question Has Been Solved by an Expert!

Get step-by-step solutions from verified subject matter experts

Step: 2 Unlock

Step: 3 Unlock

Document Format (1 attachment)

788-B-E-M-E (6756).docx

120 KBs Word File

Students Have Also Explored These Related Economics Questions!

What are the distinguishing characteristics of an oligopoly market structure?

The following three ratios have been computed using the financial statements for the year ended December 31, 2011, for Fun Science Company: The following additional information has been assembled:...

The following financial statements were prepared for the management of Worldcorp Ltd. The statements contain some information that will be disclosed in note form in the general purpose financial...

10 Concentration ratios have often been used to note the tightness of an oligopoly market. A high concentration ratio indicates a tight oligopoly market, and a low concentration ratio indicates a...

I'm struggling in this question, please help me explain. Thank you so much! Explain why firms operating in monopolistically competitive markets probably will not earn an economic profit in the long...

Strategic Leadership Real Life Case Study Assignment (Individual Basis) Purpose of the learning activity: This project will allow the students to use the concepts of Strategic Leadership learned over...

first photo is info that needs to be used the other photos are a example of the problem and how it should be done and format the numbers are diffrent 3 of 3 HW Score: 0%, 0 of 100 pts Score of 40 pts...

all the photos are step by step of what I need. i need it exacly the same format from requirment 1-2 just need the math and numbers to come from the last photo (all the photos are from a example just...

Havingn read the BusinessTech article titled "IBM forecast beats estimates for n quarterly sales and earning". Consider the type of research that may n have led to this headline. Do you think it is...

1. As a manager, you must choose between two inventory management software packages. One is a stand-alone package that only manages inventory. It allows users to define their own reports without much...

What would be the yearly earnings for a person with $9,000 in savings at an annual interest rate of 1.5 percent? (LO1.3)

The best definition of noise is: A. Any unsupportable information that finds its way onto written or oral project communications. B. Anything that interferes with transmission and understanding of a...

Use the economic theory of bargaining to characterize the torts in which the transaction costs of settling disputes are likely to be large.

For which liability standard would you expect the litigation costs to be greaternegligence or strict liability? Why? Is that an additional efficiency argument for preferring one standard to the other?

What if an accident has occurred because an employee was performing a job for which he was not qualified after the employee had falsely told the employer that he was qualified? Should the employer...

A bond with a face value of $1,000 has 10 years until maturity, carries a coupon rate of 5.2%, and sells for $1,105. a. What is the current yield on the bond? (Enter your answer as a percent rounded...

K-Too Everwear Corporation can manufacture mountain climbing shoes for $25.70 per pair in variable raw material costs and $16.95 per pair in variable labor expense. The shoes sell for $126 per pair...

During his speech to the AGM, the Chairman of Banks DIH stated the company was able to achieve an EBIT of 100, depreciation on assets was 40 , interest paid on financing facilities was 20 and final...