Chapter 7 Flashcards
1
Q
Market structure
A
Factors that affect managerial decisions including the number of firms competing in a market, the relative size of firms, technological and cost considerations, demand conditions, and the ease with which firms can enter or exit the industry.
2
Q
Four-firm concentration ratio
A
The fraction of total industry sales generated by the four largest firms in the industry
3
Q
Herfindahl-Hirschman index (HHI)
A
HHI = 10,000 Ewi^2. This gives a score for how diverse competitors are within a market. Higher scores suggest the market is dominated by fewer firms and lower scores suggest more participants.
