Concentration ratios tend to overstate the power of some corporations to influence economic outcomes because they measure output
A) For single firms rather than markets.
B) For the whole United States, which is too large a geographic market for some firms or industries.
C) Only for domestic production when the true market boundaries are international for some markets.
D) Over many industries rather than a single market.

Question

Quizplus · Accepted Answer

Concentration ratios can overstate the power of corporations because they often only consider domestic production, ignoring the fact that for some markets, the true competitive landscape is international. This means that even if a few firms dominate the domestic market, they might face significant competition on a global scale, which is not captured by concentration ratios focused solely on domestic output.

Concentration Ratios Tend to Overstate the Power of Some Corporations