Which of the following statements about competitive and/or concentrated markets is true?
A) In competitive industries,demand for a firm's product is highly inelastic.
B) The demand for each employer's products in concentrated industries is highly price-sensitive.
C) The labor demand in concentrated industries is less elastic than it is in the competitive situation.
D) Wage increase can be easily passed on to customers in competitive industries.

Question

Quizplus · Accepted Answer

In concentrated industries, there are fewer employers, resulting in less competition for workers. Due to this lack of competition, labor demand in concentrated industries is less elastic than it is in competitive situations. Therefore, option C is the true statement. Option A is incorrect because in competitive industries, demand for a firm's product is highly elastic, not inelastic. Option B is incorrect because the price sensitivity of the demand for each employer's product is higher in competitive industries rather than concentrated industries. Option D is also incorrect because in competitive industries, firms cannot easily pass on wage increase to customers due to high competition.

Which of the Following Statements About Competitive And/or Concentrated Markets