An oligopolistic industry is likely to have a large concentration ratio and a large Herfindahl index.

Question

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In an oligopolistic industry, a few firms dominate the market, leading to a high concentration ratio, which measures the market share of the largest firms. Similarly, the Herfindahl-Hirschman Index (HHI), which squares and sums the market shares of all firms in the industry, will also be high due to the significant market shares held by the few dominating firms.

An Oligopolistic Industry Is Likely to Have a Large Concentration