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Market types - Economic Factors

You want to start a company and are trying to decide between two different industries. You are doing your final research before you write your business plan.

Industry A has 20 firms and a concentration Ratio (CR) of 30%

What is the name for this type of industry?

Describe some of this industry's characteristics.

If you were in this industry and there was an increased demand for the product that pushed up the price of goods what long-run adjustments would you expect?

What does your anticipated adjustment process imply about the CR for the industry?

Industry B has 20 firms and a Concentration Ratio (CR) of 80%

What is the name of this industry's characteristics?

Describe some of this industry's characteristics.

What are some reasons why this industry has a high CR while Industry A had a low CR?

Is it possible for smaller firms to thrive and profit in Industry B?

Solution Summary

In about 631 words, this solution discusses different types if industry, as well as their characteristics, and how this relates to concentration ratio in an industry.

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