In a specific industry the concentration ratio is 100%. What can we say for sure
ID: 1095829 • Letter: I
Question
In a specific industry the concentration ratio is 100%. What can we say for sure about this industry?
It is a monopoly
It is less competitive than an industry with a concentration ratio of 95%
This industry is clearly monopolistically competitive
This industry may be an oligopoly
This industry is purely competitive
A.It is a monopoly
B.It is less competitive than an industry with a concentration ratio of 95%
C.This industry is clearly monopolistically competitive
D.This industry may be an oligopoly
E.This industry is purely competitive
Explanation / Answer
i choose B because it cant be c or e. A concentration ration of 100% could mean a high oligopoly or a monopoly, but we can't be sure because we don't know how many firms are in the industry. However we now that the lower the concentration rate the more competitve it is, so if the concentration rate is higher than 95 % it has to be less competitive.