Concentration ratios may be inaccurate indicators of the degree of monopoly power in an industry because

Question

Quizplus · Accepted Answer

Foreign competition is not considered in concentration ratios, which can lead to an underestimation of the competitive pressures faced by firms in an industry. Concentration ratios typically measure the market share of the largest firms within a specific industry domestically, without accounting for the impact of international competitors.

Concentration Ratios May Be Inaccurate Indicators of the Degree of Monopoly