What are the disadvantages of high concentration ratio in industry ?

What are the disadvantages of high concentration ratio in industry ?

Answers
Concentration ratios are used to show the extent of market control of the largest firms in the industry, and the degree to which an industry is oligopolistic.
jon.ellis
29 April 2011
A high concentration ratio would imply that a small number of businesses control a large part of a particular industry.
jon.ellis
29 April 2011
If a small number of businesses control a market, they could in theory directly influence the price customers pay. If their primary objective is to make superior shareholder returns they are likely to collaborate to charge the higher price and get higher profits.
jon.ellis
29 April 2011
I would read up on oligoplies, and think about how competition (or possibly the lack of it) effects industries like banking (for example) .
jon.ellis
29 April 2011
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