An industry is deemed concentrated when ________.

Question

Quizplus · Accepted Answer

An industry is considered concentrated when a few firms account for a large fraction of the total sales in that industry. This is typically measured by the concentration ratio, which shows the percentage of total sales accounted for by the largest firms in the industry. Choice A is incorrect because small market share for each firm is the opposite of concentration. Choice B is incorrect because all firms charging a price lower than the average cost of production is a sign of intense competition, not concentration. Choice C is incorrect because zero economic profits may be due to competitive pressures or other factors, and does not necessarily indicate concentration.

An Industry Is Deemed Concentrated When ________