An industry's typical percentage markup
A) should be expected to fluctuate wildly from year to year
B) equals 1 - (average cost per unit/average revenue per unit)
C) is determined by collusion
D) is of price concern for the macroeconomy
E) is relatively low if there is fierce competition among firms.

Question

Quizplus · Accepted Answer

High competition among firms typically results in lower prices and lower profit margins, which means the percentage markup is relatively low. The other options are incorrect: A is not true as industries typically have relatively stable markup percentages, B is an equation for calculating markup, but not a statement about the typical percentage, C is illegal and unethical, and D refers to macroeconomic concerns rather than industry markup.

An Industry's Typical Percentage Markup