Question

In order to understand how competitive an industry is, economist use the either the (1) ____-firm concentration ratio, which looks at the output of the ____ largest firms/total output for the industry as a whole (industries in which these firms account for ____ percent or more are considered to be oligopolies) or (2) the _________ Index which is the squared percentage market shares of all firms in the industry. In a purely competitive market, the index would approach _______ while in a monopoly, the index would reach its maximum of _________. In the long run, a monopolistically competitive market will have a _______ profit.

Monopolistic competition is inefficient because:

1. P is (greater than, less than, or equal to) min ATC meaning that it is NOT ___________ efficient (i.e. the firm is producing where ATC is not at its minimum). 2. P is (greater than, less than, or equal to) MC meaning that is it NOT __________ efficient (i.e. the firm is underallocating resources).

Answer 1

order to understand how competitive an industry is, economist use the either the (1) firm concentration ratio, which looks at the output of the (•) largest firms/total output for the industry as a whole (industries in which these firms account for (•) 60 percent or more are considered to be oligopolies) or (2) the herfindahl hirschman Index which is the squared percentage market shares of all firms in the industry. In a purely competitive market, the index would approach (•) 100 while in a monopoly, the index would reach its maximum of (•)10000 In the long run, a monopolistically competitive market will have a (•) zero economic profit profit.

Monopolistic competition is inefficient because:

1. P is (•)greater than, min ATC meaning that it is NOT (•) non productive efficient (i.e. the firm is producing where ATC is not at its minimum). 2. P is (•)greater thanMC meaning that is it NOT (•) not allocative efficient (i.e. the firm is underallocating resources

If you are Statisfied with answer plz upvote thank you