Question

Discuss specific firm behavior that reduced the level of competition in an industry. What are the opportunity costs of greater concentration?

Answer 1

. The firm behaviour that reduced the level of competition in an industry when the firm is not following the price set up by the industry.
The specific firm behaviour is that the level of competition is not existing when the firm is not selling the competitive product in the market, therefore, it is important from the firm point of view to follow the policies implemented by the industry.
In the industry, prices are determined at a point where demand intersects the supply, therefore, this is a specific Priceline which is followed by all the firms under the perfectly competitive market but under the monopolistically market it is important to maintain the market prices as per the policies laid down by the other firms but when the goods are not under the position of competitive goods then firm changes or reduced the level of competition in the market.
The new market establishment is the opportunity of greater concentration towards a specific product in the market.