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ECON 101 2Midtermreview

Once the firm has chosen its plant the firm incurs

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Unformatted text preview: iation §༊ Each firm possesses an element of market power §༊ No restrictions on entry of new firms to the industry Oligopoly is a market structure in which §༊ A small number of firms compete. §༊ The firms might produce almost identical products or differentiated products. §༊ Barriers to entry limit entry into the market. Monopoly is a market structure in which §༊ One firm produces the entire output of the industry. §༊ There are no close substitutes for the product. §༊ There are barriers to entry that protect the firm from competition by entering firms. Measures of Concentration Economists use two measures of market concentration: The four- firm concentration ratio The Herfindahl–Hirschman index (HHI) The Four- Firm Concentration Ratio The four- firm concentration ratio is the percentage of the total industry...
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