The larger the four-firm concentration ratio,the ________ competition within an industry; the larger the Herfindahl-Hirschman Index,the ________ competition within an industry.
A) more; more
B) more; less
C) less; more
D) less; less
E) The premise of the question is wrong because the four-firm concentration ratio applies only to markets with four firms in it and these markets are, by definition, not competitive.

Question

Quizplus · Accepted Answer

A larger four-firm concentration ratio indicates that a few firms hold a significant market share, suggesting less competition. Similarly, a larger Herfindahl-Hirschman Index indicates higher market concentration and less competition.

The Larger the Four-Firm Concentration Ratio,the ________ Competition Within an Industry;