One problem with measures of market concentrations is that they do not
A) accurately measure concentrations in markets with fewer than 4 firms.
B) allow for all market types.
C) account for the difficulty in collecting total revenue data.
D) account for barriers to entry.
E) create meaningful comparisons across industries.

Question

Quizplus · Accepted Answer

Measures of market concentration often do not account for barriers to entry, which can significantly impact competition in a market. This means that a market with few firms may not necessarily be highly concentrated if there are no barriers to entry that would prevent new firms from entering and competing. Additionally, some measures of market concentration may not be applicable to all market types, and collecting total revenue data can be difficult in some cases. However, the primary limitation of these measures is the failure to account for barriers to entry.

One Problem with Measures of Market Concentrations Is That They