MACROECONOMICS

Macroeconomics

Macroeconomics

Part A)

An industry comprises of 20 firms, and the concentration Ratio is 30%, according to the market structure the firm concentration ratio less than 40% it termed as monopolistic competition. Monopolistic competition refers market structure where there are a significant number of producers operating in the market without a dominant control in the market with the products that are similar but not identical.

The first characteristic of the monopolistic competition is that there are many sellers in the market and competing each others. Second characteristic is product differentiation which mean that each company offers a product i.e. at least ...