BE-Assignment-2 - BUSINESS ECONOMICS ASSIGNMENT 2 Prepared by ANISH M Question 1 Forey Inc competes against many other firms in a industry Over the last

BE-Assignment-2 - BUSINESS ECONOMICS ASSIGNMENT 2 Prepared...

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BUSINESS ECONOMICS ASSIGNMENT – 2 Prepared by: - ANISH M Question 1: Forey, Inc., competes against many other firms in a industry. Over the last decade, several firms have entered this industry and, as consequences, Forey is earning a return on investment that roughly equals the interest rates. Furthermore, the four-firm concentration ratio and Herfindahl Hirschman index are both quite small. Based on this information, which market structure best characterizes the industry in which Forey competes? Explain the characteristics this market structure and what happens to the Forey Inc’s profit in the short-run and long-run.
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