The higher the concentration ratio is in an industry, the more likely it is that
A) the industry is perfectly competitive.
B) the market share of the smallest four firms is larger.
C) the market share of the largest four firms is smaller.
D) the industry has an oligopoly.

Question

Quizplus · Accepted Answer

The higher the concentration ratio is in an industry, the more likely it is that the industry has an oligopoly. In an oligopoly, a small number of firms dominate the market and have significant control over prices and output levels. This is reflected in a high concentration ratio, which measures the combined market share of the largest firms in the industry.

The Higher the Concentration Ratio Is in an Industry, the More