Girlfriend's Salon is the only hair salon in Sunnyvale, a small town. Which of the following statements correctly describes a concentration measure for salons in Sunnyvale?
A) The measure would incorrectly show an uncompetitive market structure because many firms could open in Sunnyvale without any restrictions.
B) The measure would incorrectly show an uncompetitive market because the measure does not reflect the low prices charged at Girlfriend's Salon.
C) The measure would correctly show a monopoly exists because Girlfriend's revenues are low.
D) The measure would incorrectly show a perfectly competitive market exists because new salons can open and compete with Girlfriend's.
E) The measure would correctly show a monopoly exists in town because there are so few residents.
Correct Answer:
Verified
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