Question

What is the correlation between, and evidence behind, market concentration and price levels? Do you find any relationship between lack of competition and other economic variables? Use at least one article from The Wall Street Journal, or another scholarly reference, to support your response. What are the ethical ramifications of market concentration?

Answer 1

Fixed trade spending, which consists of "slotting fees," "pay-to-stay" arrangements, new store allowances and other payments to retailers in exchange for shelf space and desired product display, does not affect consumer prices. lack of competition creates monopoly which may cause the other market variables to be disregarded by the supplier. Policy makers and audit market participants have expressed concern that the current level of auditor competition is low, resulting in a negative impact on audit quality. However, restatements are more likely to occur in metropolitan statistical areas (MSAs) that have higher auditor competition. The association between audit market competition and restatements is statistically and economically significant. finding of a positive relationship between the likelihood of restatement and audit market competition is relevant to the ongoing debate regarding audit quality and the concentration of audit markets