In general, the higher the concentration ratio in an industry, the:
A) greater the ratio of MC to ATC.
B) lower the ratio of MC to ATC.
C) less firms need to pay attention to individual rivals.
D) more firms need to pay attention to individual rivals.

Question

Quizplus · Accepted Answer

A higher concentration ratio means that there are fewer firms in the industry, which leads to more interdependence among the remaining firms. As a result, each firm needs to pay more attention to its rivals’ actions and responses to maintain its market position.

In General, the Higher the Concentration Ratio in an Industry