contestada

Suppose that the demand in a particular industry is given by Qd = 100 - 2P. When the market price in the industry is $10 per unit, total demand in the industry is ___. Furthermore, assume that each of the four largest firms in the industry sell 15 units. Based on this information, the four-firm concentration ratio is ____.

a. 45 units; 0.25
b. 80 units; 1.00
c. 45 units; 0.75
d. 80 units; 0.75

Respuesta :

ogechukwubenedict

Answer: d. 80 units; 0.75

Explanation:

Total demand is gotten from the formula Qd = 100 - 2P

P = $10

Therefore the quantity demanded = 100 - 2(10) = 100 - 20 = 80 units.

Concentration ratios are applied to show the extent of market control/competitiveness of the largest firms in the industry (usually four or eight largest firms). It also illustrates the degree to which an industry is oligopolistic. An oligopoly is apparent when the top five firms control over 60% of total market sales, according to the concentration ratio.

If four of the largest firms sell 15 units each, total sales from the four firms is 4 x 15 = 60 units.

Concentration ratio = total sales of four largest firms divided by total sales of all firms

= 60/80 = 0.75

Otras preguntas