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    Question

    Which of the following four-firm concentration

    ratios is most consistent with monopolistic competition?
    A 0% Correct Answer Incorrect Answer
    B 25% Correct Answer Incorrect Answer
    C 100% Correct Answer Incorrect Answer
    D 75% Correct Answer Incorrect Answer

    Solution

    The four-firm concentration ratio is the percentage of the value of sales accounted for by the four largest firms in the industry. A ratio of less than 40 percent: indication of monopolistic competition.

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