Problem:
An industry with 20 firms but the CR = 80% is called "high concentration", for a concentration ratio of 80 to 100 percent is viewed as high concentration. Government regulators are usually most concerned with industries falling into this category. It is a good indication of oligopoly and that these four firms have significant market control.
Answers Needed to these:
Q1. What are some reasons why this industry has a high CR while the other industry has a low CR?
Q2. IS it possible for smaller firm to thrive and profit in such an industry? How?
Q3. Contrast the effects efficiency if the dominating firms use a price leadership model versus a contestable markets model.