Suppose that in a small town, the market for cement had five companies with market shares 0.3, 0.2, 0.2, 0.2, and 0.1. The following year, a new firm entered but the leading firm increased its share. Now the shares are 0.5, 0.1, 0.1, 0.1, 0.1, and 0.1. Did the market become more competitive or less competitive?

Suppose that in a small town, the market for cement had five companies with market shares 0.3, 0.2, 0.2, 0.2, and 0.1. The following year, a new firm entered but the leading firm increased its share. Now the shares are 0.5, 0.1, 0.1, 0.1, 0.1, and 0.1. Did the market become more competitive or less competitive?

Microeconomics

13th Edition

ISBN:9781337617406

Author:Roger A. Arnold

Publisher:Roger A. Arnold

Chapter9: Perfect Competition

Section: Chapter Questions

Problem 8QP

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