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Chapter 26: Q. a - For Critical Thinking (page 581)

What wats the five-firm concentration ratio in the broadband industry?

Sources are listed at the end of this chapter.

Short Answer

Expert verified
  • Three and five firm concentration ratios are also available.
  • The concentration ratio is derived by multiplying the market share percentages owned by the businesses in an industry with the most specified firms.

Step by step solution

01

Step 1:Concentration Ratio 

  • Proportion The intensity ratio is used to identify whether a certain industry is made up of a few large or small enterprises.
  • The four-firm concentration ratio, which consists of the percentage market share of the four largest businesses in an industry, is a regularly used concentration ratio.
02

Step 2:The eight-firm concentration ratio,  

The eight-firm concentration ratio is derived using an industry's eight

The revenue growth of the major businesses, same like the four-firm concentration ratio.

Three-firm and five-firm concentration ratios are two more concentration ratios that can be employed.

03

Step 3:There are two more concentration ratios 

  • Three and five firm concentration ratios are offered as well.
  • The concentration ratio is derived by multiplying the market share percentages owned by the businesses in an industry with the most specified firms.

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Most popular questions from this chapter

Understand how to apply game theory to evaluate the pricing strategies of oligopolistic firms

Consider Figure 26-2. Suppose conditions in the industry change in such a way that the amount that each firm makes if it charges a high price when the other firm charges low price increases from \(2million to \)3million. Is the firm's pricing decision altered by this change and, if so, in what way? Explain briefly.

Take a look back at the data regarding the inkjet printer industry in Problem 26-2, and answer the following questions.

a. Suppose that consumer demands for inkjet printers, the prices of which are readily observable in office supply outlets and at Internet sites, are growing at a stable pace. Discuss whether circumstances are favorable to an effort by firms in this industry to form a cartel.

b. If the firms successfully establish a cartel, why will there naturally be pressures for the cartel to break down, either from within or from outside?

Outline the fundamental characteristics of oligopoly

Consider the following list, and classify each item according to the appropriate type of two-sided market-audience-making, matchmaking, shared input, or transaction-based-and write a one sentence answer justifying your classification. (Hint: You may wish to check out the firms' Web sites to assist in answering this question.)

a. Mastercard.com

b. FreeBSD.com

c. Plentyoffish.com

d. WSJ.com
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