According to William Shepherd's examination of competitive trends in the U.S.economy, a market is effectively competitive if
A)the top four firms supply more than 60 percent of the market, have stable market shares, and cooperate with each other
B)the top four firms supply more than 60 percent of the market, have stable market shares, and compete with each other
C)the industry exhibits low concentration, few barriers to entry, and little or no collusion
D)the industry exhibits low concentration and little or no collusion, despite significant barriers to entry
E)the dominant firm has two close rivals

Question

Quizplus · Accepted Answer

According to William Shepherd's examination of competitive trends in the U.S. economy, a market is effectively competitive if the industry exhibits low concentration, few barriers to entry, and little or no collusion. This means that there are many competitors in the market, entry is easy, and firms do not coordinate with each other to limit competition. Therefore, option C is the best choice.

According to William Shepherd's Examination of Competitive Trends in the U.S.economy