Question

Question 25 2 pts In the automobile industry, the four largest firms have market shares of 52%, 16%, 8%, and 5%. The four-firm concentration ratio equals: 81 52 162 3049

Answer 1

Question 25

Four firm concentration ratio is calculated by adding up the market share of four largest firms in the market or industry.

The market share of the four largest firms in the automobile industry is as follows -

Firm 1 = 52%

Firm 2 = 16%

Firm 3 = 8%

Firm 4 = 5%

Calculate the four firm concentration ratio =

Four-firm concentration ratio = Market share of Firm 1 + Market share of Firm 2 + Market share of Firm 3 + Market share of Firm 4

Four-firm concentration ratio = 52% + 16% + 8% + 5% = 81%

Thus,

The four-firm concentration ratio equals 81.

Question 24

When price discrimination is undertaken based on characterisitics of different groups of customers then it is said to be third degree price discrimination.

So,

Students discount is an example of Third Degree price discrimination.

Question 23

When price discrimination is undertaken on basis of quantity purchased then it is termed as second degree price discrimination.

So,

Buy two, get one free is an example of Second Degree price discrimination.