Microeconomics Essay

909 Words4 Pages
Week 3 – Assignment Carol Ann Hartley ECO204: Principles of Microeconomics Raymond Hudson December 19, 2011 In this paper I will discuss the concentration ratios for fluid milk; women’s and girls’ cut and sew dresses, envelopes, and electronic computers. I will also define the difference of high and low level of competition between the four companies. I will discuss which companies are qualified as oligopolies manufacturer. Discuss whether or not oligopolies are considered to be bad for society or good for the economy. Here I will discuss the different rolls of product concept. Businesses use feedback information from their customers to determine if changes need to be made to their product, and this can include new technology and the pricing of the product. What options does a business have to survive in this economy to pay their bills and still be productive? Fluid milk (311511), has a concentration ratio of 42.6%. The four-firm concentration ratio is the proportion of total output produced by the four largest firms in the industry. Concentration ratios are calculated based on the market shares of the largest firms in the industry. A four-firm concentration ratio over 90 (that is, 90 percent of industry output is produced by the four largest firms) is a good indication of oligopoly and that these four firms have significant market control. Alternatively a four-firm concentration ratio of 0.001 (that is, the four largest firms are responsible for one-thousandth of one percent of industry output) is good indication that the industry is monopolistically competitive and that the four largest firms have very little market control. However, because there is a fine line between oligopoly and monopolistic competition blend into, there is no distinct concentration ratio that can be used to separate one

More about Microeconomics Essay

Open Document