Manufacturing Industry Evaluation
April 2, 2012
This paper is about evaluating the manufacturing industry. First, I will find the four-firm concentration ratios for the following industries: fluid milk (311511), women’s and girl’s cut and sew dresses (315233), envelopes (322232), and electronic computers (334111). I will also answer the following questions: which industries are characterized by a high level of competition? Which industries are characterized by a low level of competition? Define oligopolies and identify which of the listed industries qualify as oligopolies. Name and describe some of the firms that operate in the listed industries that qualify as oligopolies. And finally discuss whether or not oligopolies are always bad for society, using examples from the firms I described.
The four-firm concentration ratio is commonly used to indicate the degree to which an industry is oligopolistic and the extent of market control held by the four largest firms in the industry. The four-firm concentration rations for the following industries are as follows: fluid milk (311511) is 315, women’s and girl’s cut and sew dresses (315233) is 525, envelopes (322232) is 166, and electronic computers (334111) is 166. Envelopes are characterized as a high level of competition and fluid milk is characterized as a low level of competition.
Oligopolies are a market form in which a market of industry is dominated by a small number of sellers. Business that are a part of an oligopoly would be less concentrated than in a monopoly, but more concentrated than in a competitive system. Oligopolies develop in industries that require a large sum of money to start. Existing companies in oligopolies discourage new companies because of exclusive access to resources or patented processes, cost advantages as the result of mass production, and the cost of convincing consumers to try a new product. Finally, companies in...