Question

    Which of the following four-firm concentration ratios is most consistent with perfect competition?

    A 0% Correct Answer Incorrect Answer
    B 25% Correct Answer Incorrect Answer
    C 100% Correct Answer Incorrect Answer
    D 75% Correct Answer Incorrect Answer
    E 40% Correct Answer Incorrect Answer

    Solution

    The four-firm concentration ratio is the percentage of the value of sales accounted for by the four largest firms in the industry. A ratio of 0 percent: indication of perfect competition.

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