If an industry were perfectly competitive, the four-firm concentration ratio would be close to ________ and the Herfindahl-Hirschman index would be close to ________.
A) 0; 0
B) 0; 100
C) 100; 0.
D) 100; 100.

Question

Quizplus · Accepted Answer

In a perfectly competitive industry, there are many small firms, so the four-firm concentration ratio would be close to 0, indicating no dominance by the top four firms. The Herfindahl-Hirschman index would also be close to 0, reflecting a lack of market concentration.

If an Industry Were Perfectly Competitive, the Four-Firm Concentration Ratio