Select all that apply Which factors limit R&D expenditures in highly concentrated industries? Multiple select question. The firms are small. It is difficult for the firms to maintain profits from product innovation. There is a lack of competitors. The firms are already earning high profits. The costs of innovation are high.
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Forey, Inc., competes against many other firms in a highly competitive industry. Over the last decade, several firms have entered this industry and, as a consequence, Forey is earning a return on investment that roughly equals the interest rate. Furthermore, the four-firm concentration ratio and the Herfindahl-Hirschman index are both quite small, but the Rothschild index is significantly greater than zero. Based on this information, which market structure best characterizes the industry in which Forey competes? Explain.
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Suppose the Herfindahl indexes for industries A, B, and C are 2,200, 2,000, and 1,600, respectively. These data imply Multiple Choice that market power is greatest in industry C. nothing about the degree of concentration across the three industries. that market power is greatest in industry A. that market power is greatest in industry B. Industries X and Y both have four-firm concentration ratios of 60 percent, but the Herfindahl index for X is 3,369, while that for Y is 2,412. These data suggest Multiple Choice that price competition is stronger in X than in Y. greater market power in X than in Y. that X is more technologically progressive than Y. greater market power in Y than in X.
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