Asked by Owuraku Agyekum on Jun 01, 2024
Verified
If an industry evolves from monopolistic competition to oligopoly, we would expect
A) the four-firm concentration ratio to decrease.
B) the four-firm concentration ratio to increase.
C) the four-firm concentration ratio to remain the same.
D) barriers to entry to weaken.
Barriers to Entry
Obstacles that make it difficult for new competitors to enter a market.
Monopolistic Competition
A market structure characterized by many sellers offering products that are similar but not identical, allowing for some degree of market power.
Four-Firm Concentration
is a metric that measures the total market share held by the four largest firms within an industry, indicating the level of market concentration and competition.
- Comprehend the principle and traits of oligopoly.
Verified Answer
ZK
Zybrea Knight
Jun 04, 2024
Final Answer :
B
Explanation :
When an industry evolves from monopolistic competition to oligopoly, it means that fewer firms are controlling a larger portion of the market. The four-firm concentration ratio, which measures the total market share of the four largest firms in the industry, would increase as the market becomes more dominated by a smaller number of firms.
Learning Objectives
- Comprehend the principle and traits of oligopoly.