he following table shows the dollar amount of sales in 2016 for the four largest
ID: 1167066 • Letter: H
Question
he following table shows the dollar amount of sales in 2016 for the four largest firms in the above-ground pool industry. Total industry sales in 2016 were $467,000. Use this table to answer the following questions:
If Clear Water Island acquired Poolside Paradise, the concentration ratio would ________ and the market price of pools would likely ________.
increase; fall
The following table shows the total dollar amount of sales in 2012 for the four largest firms in the adhesive manufacturing industry. Total industry sales in 2012 were $782,000. Use this table to answer the following questions:
If Glues R Us split into two separate companies, the concentration ratio would ________ and the market price of adhesive would likely ________.
decrease; rise
When customers face significant ________ costs, the demand for the existing product becomes more inelastic.
Firm Name Sales in 2016 Clear Water Island $112,000 Poolside Paradise 47,000 Nautical Waters 19,000 Sunny Plastics 14,000 All other firms in industry combined 275,000Explanation / Answer
High concentration ratio means the market is far from competitive, so the market price increases. 100% concentration ratio means monopoly. 60 to 80% is an oligopoly.
If clear water island acquired poolside paradise, the concentration ratio would increase and the market price of pools would likely rise. The first option is correct.
If Glues R Us split into two separate companies, the concentration ratio would decrease and the market price would likely to fall. The second option is correct.
People's demand is inelastic when switch from one supplier to other become costly. The second option is correct.
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.