Suppose one firm accounts for 55 percent of the global market share for a product, while 147 other firms account for the remaining 45 percent of the market
With such a large number of buyers and sellers, is this market likely to be competitive? Explain your answer.
A large number of buyers and sellers ensure that the market is competitive only if a single firm's choice of how much to produce does not affect market outcomes. However, in this case, if the firm that produces 55 percent of the output in the market decides to reduce production, this is likely to significantly affect the market price of the product. So, a large number of sellers in a market does not automatically ensure that it is competitive; it is the share of output that each firm produces that matters.
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Which of the following is most likely to happen if the Federal Trade Commission (FTC) wins a suit against alleged violators of antitrust law?
a. The FTC will receive compensation up to three times the damage caused. b. The FTC will not be able to impose substantial penalties. c. The FTC will force firms to break up through dissolution. d. The FTC will force firms to merge together. e. The FTC will file criminal actions that may result in fines but not prison sentences.
Deadweight loss measures the loss in society's welfare that occurs because a monopolist does not produce the socially efficient level of output
a. True b. False Indicate whether the statement is true or false