Concentration ratios are used to determine
A)the number of firms in an industry.
B)the potential for entry into an industry.
C)the degree of product differentiation.
D)the extent (degree)of oligopoly.

Question

Quizplus · Accepted Answer

Concentration ratios measure the extent of oligopoly in an industry by measuring the share of total industry sales held by the largest firms. A higher concentration ratio indicates fewer firms with a greater market share, which is characteristic of an oligopoly. Therefore, the answer is D, the extent (degree) of oligopoly.

Concentration Ratios Are Used to Determine