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Chapter 11: Q 15 (page 272)

Why can it be difficult to decide what a “market” is for purposes of measuring competition?

Short Answer

Expert verified

Goods and services are non-exclusive.

Step by step solution

01

Step1. Concept

It is important to identify and define markets clearly to measure competition and curb monopoly power if exists. It helps to predict the trends in industry and markets.

02

Step2. Explanation

It might be specifically difficult to define markets because goods and services have several many uses, and are hence non-exclusive to a single market.

For example, tomatoes belong to the vegetable market, but are also used as a raw material in several food-processing industries like ketchup manufacturing units.

It is hence this interdependence which makes it difficult to define market and measure competition.

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Most popular questions from this chapter

As a result of globalization and new information and communications technology, would you expect that the definitions of markets that antitrust authorities use will become broader or narrower?

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ratio? What does a high measure mean about the extent of competition?

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