The accompanying table shows the dollar amount of sales in 2012 for the four largest firms in the above-ground pool industry. Total industry sales in 2012 were $467,000. Use this table to answer the questions. $\begin{array}{lr}\text { Firm Name }&\text { Dollar Amount of Sales in } 2012\
\text { Bhre Water Island, Inc. } & \$ 112,000 \
\text { Backyard Paradise, Inc. } & \$ 47,000 \
\text { Tropical Waters, Inc. } & \$ 19,000 \
\text { Poolside Plastics, Inc. } & \$ 14,000 \
\text { All other firms in industry combined. } & \$ 275,000
\end{array}$
-If Blue Water Island, Inc. acquired Backyard Paradise, Inc., the concentration ratio would __________ and the market price of pools would likely __________.

Question

The accompanying table shows the dollar amount of sales in 2012 for the four largest firms in the above-ground pool industry. Total industry sales in 2012 were $467,000. Use this table to answer the  questions. $\begin{array}{lr}\text { Firm Name }&\text { Dollar Amount of Sales in } 2012\
\text { Bhre Water Island, Inc. } & \$ 112,000 \
\text { Backyard Paradise, Inc. } & \$ 47,000 \
\text { Tropical Waters, Inc. } & \$ 19,000 \
\text { Poolside Plastics, Inc. } & \$ 14,000 \
\text { All other firms in industry combined. } & \$ 275,000
\end{array}$
-If Blue Water Island, Inc. acquired Backyard Paradise, Inc., the concentration ratio would __________ and the market price of pools would likely __________.

Quizplus · Accepted Answer

The concentration ratio would increase because the combined sales of the two firms would represent a larger share of the total industry sales. The market price of pools would likely rise due to reduced competition.

The Accompanying Table Shows the Dollar Amount of Sales in 2012