Consider an industry which has a total of six firms. We will use this data in th
ID: 1227854 • Letter: C
Question
Consider an industry which has a total of six firms. We will use this data in the next question as well. Output per firm is described by the following table:
1.) Carefully following all numeric directions, calculate the four-firm concentration ratio as discussed in class.
2.)If we use 80% as the cutoff for an oligopoly, the industry composed of the six firms above ___________ likely an oligopoly, because __________.
Enter your answer "as a percent, but without a percentage sign." Do any rounding before conversion to percent. In other words, if you get 0.2495, enter 24.95 in the blank.
3.)Compared to a perfectly competitive firm, a monopolistic competitor will produce __________ output. It produces where ATC is ___________.
Firms Units Produced 1 4,380 2 900 3 2,100 4 840 5 660 6 1,120Explanation / Answer
Four firm concentration ratio=Output of top four firms/ total output of the industry
=4380+2100+1120+900/4380+2100+1120+900+840+660
=8500/10,000
=.85
or85%
b.
)If we use 80% as the cutoff for an oligopoly, the industry composed of the six firms above __is_________ likely an oligopoly, because _____production is concentrated among relatively few producers_____.
For major firms produce 85% of the total product.
c. )Compared to a perfectly competitive firm, a monopolistic competitor will produce ____less______ output. It produces where ATC is ___________.decreasing. A monopolist produces less than the socially desirable quantity of output.