Concentration ratios are not perfect guides to industry concentration, because they
A)do not take into account foreign competition and competition from substitute goods.
B)take into account foreign competition and competition from substitute goods.
C)do not take into account advertising expenditures.
D)do not take into account tax payments.

Question

Quizplus · Accepted Answer

Concentration ratios, which measure the market share of the largest firms in an industry, do not account for foreign competition or competition from substitute goods, both of which can significantly affect market dynamics and competition levels.

Concentration Ratios Are Not Perfect Guides to Industry Concentration, Because