If the four-firm concentration ratio for the market for diapers is 73 percent,then this industry is best characterized as
A) a monopoly.
B) monopolistic competition.
C) an oligopoly.
D) perfect competition.
E) either a monopoly or monopolistic competition.

Question

Quizplus · Accepted Answer

The four-firm concentration ratio (CR4) of 73% indicates that four firms control a significant portion of the market share, suggesting that the industry is best characterized as an oligopoly. In a monopoly or monopolistic competition, a single firm dominates the market or there are many small firms with negligible market power. In perfect competition, no single firm has any control over the market.

If the Four-Firm Concentration Ratio for the Market for Diapers