Econ Unit 3 Individual Project

Econ Unit 3 Individual Project - Unit 3 Individual Project...

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Unit 3 Individual Project Unit 3 Individual Project BUS 305 – Economics in a Global Environment by Lorraine M. Huff AIU Online December 6, 2009 Number of firms Four-Firm Concentration Ratio Describe type of industry structure 20 30% monopolistic 20 80% oligopoly For an industry with 20 firms and the CR is 30%, it can be described as monopolistic competition. The form of economic competition known as Monopolistic competition occurs when; there are many producers and many consumers in a given market, consumers have clearly defined preferences - the goods and services are heterogeneous, freedom of entry. Since there is freedom of entry, in the long run, more and more firms would come into the market to make profit and the prices would stabilize until the net profit for all firms is theoretically reduce to zero. There would be no further incentive for a new firm to enter the market, so the market would be stabilized too. The industry which has 20 firms but the CR for the industry is 80% is obviously an
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Econ Unit 3 Individual Project - Unit 3 Individual Project...

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