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What type of competition would most likely exist with a four-firm concentration ratio of 94?
Either an oligopoly (dominated by a few firms) or monopoly (if these 4 firms collude - control price and supply)
Which is the reason why there is no advertising by individual firms under pure competition?
Under pure competition, firms produce a homogeneous product, so there is no reason to advertise. Pure competition is also known as perfect competition.
Supernormal profit of monopolistic competition?
In the short run, abnormal profits exist but in the long run, it gets eroded away because new firms enter the industry.
What illegal economic function causes business firms to combine to prevent competition?
A cartel or monopoly causes business firms to combine to prevent competition.
There is no control over price by firms in?
Pure competition
Why do governments use patents to block entry into some markets when patents prohibits competition?
They use the patents to do just that, they input patents so the firms that are already in the market continue without competition. Depending on the situation government officials can be paid off to input these patents so firms in the current market can continue their oligopoly.
What type of competition would most likely exist with a four-firm concentration ratio of 94?
Either an oligopoly (dominated by a few firms) or monopoly (if these 4 firms collude - control price and supply)
Why pure competition cannot exist?
Pure competition cannot exist because in a perfectly competitive market, there would be a very large number of small firms producing identical products, with no barriers to entry or exit. In reality, markets often have barriers to entry, firms have some degree of market power, and products are not always identical due to differences in quality or branding. These factors prevent pure competition from being achieved.
Why do Firms trying to avoid competition?
Firms try to avoid competition so that they can set higher profits and earn greater profits.
Which is the reason why there is no advertising by individual firms under pure competition?
Under pure competition, firms produce a homogeneous product, so there is no reason to advertise. Pure competition is also known as perfect competition.
Supernormal profit of monopolistic competition?
In the short run, abnormal profits exist but in the long run, it gets eroded away because new firms enter the industry.
What illegal economic function causes business firms to combine to prevent competition?
A cartel or monopoly causes business firms to combine to prevent competition.
Why do small firms exist?
Small firms exist because they help strengthen the economy. Smaller firms create jobs and pay taxes that help support the community.
Why do firms exist Adam smith?
Firms exist in order to minimize transactions costs. Tough that is only one of many reasons.
There is no control over price by firms in?
Pure competition
How do firms engage in price competition?
Firms might engage in price competition by advertising that they offer the lowest price on selected merchandise. Price competition lowers the selling price of the good, relative to competitors' prices.-From Usatestprep.com
What Market structures that can exist in a free market system?
In a free market system, several market structures can exist, including perfect competition, monopolistic competition, oligopoly, and monopoly. Perfect competition features many buyers and sellers with identical products, leading to no single entity influencing prices. Monopolistic competition allows for product differentiation among many firms, while oligopoly involves a few dominant firms that can influence market prices. Lastly, a monopoly exists when a single firm controls the entire market for a product or service, leading to significant pricing power.
