The following table shows the dollar amount of sales in 2016 for the four largest firms in the above-ground pool industry.Total industry sales in 2016 were $467,000.Use this table to answer the following questions:

-If Clear Water Island acquired Poolside Paradise,the concentration ratio would ________ and the market price of pools would likely ________.
A) increase; fall
B) increase; rise
C) decrease; not change
D) decrease; fall
E) decrease; rise

Question

The following table shows the dollar amount of sales in 2016 for the four largest firms in the above-ground pool industry.Total industry sales in 2016 were $467,000.Use this table to answer the following questions:
 
-If Clear Water Island acquired Poolside Paradise,the concentration ratio would ________ and the market price of pools would likely ________.
A) increase; fall 
B) increase; rise 
C) decrease; not change 
D) decrease; fall 
E) decrease; rise

Quizplus · Accepted Answer

The concentration ratio would increase because the acquisition would reduce the number of competitors in the market, leading to a higher market share for the combined entity. The market price of pools would likely rise due to reduced competition, which could lead to less pressure to keep prices low.

The Following Table Shows the Dollar Amount of Sales in 2016