Price leadership model versus contestable markets model

Reference no: EM1375752

An industry with twenty companies but the CR = 80 percent is called "high concentration", for a concentration ratio of 80 to 100% is viewed as high concentration. Government regulators are usually most concerned with industries falling into this category. It is a good indication of oligopoly and that these four firms have significant market control.

Answers Needed to these:

What are some reasons why this industry has a high CR while the other industry has a low CR?

IS it possible for smaller firm to thrive and profit in such an industry? How?

Contrast the effects efficiency if the dominating firms use a price leadership model versus a contestable markets model.

Reference no: EM1375752

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