COMM 380 Exam 2
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded
A+
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1. Definition of a market Answer: - collection of sellers and buyers
-there are product markets and geographic markets
2. Two dimensions you need to consider when defining a market Answer:
product markets and geographic markets
3. What IO stands for Answer: Industrial Organizational (IO) Model
4. The key premise of the IO model Answer: - Suggests that a firm's external
environment influences its strategic choices.
-Studies the structure of markets where firms compete against one another.
-The IO model is also referred to as the SCP model(Structure Conduct Performance)
5. SCP Paradigm Answer: - Argues that there is a direct relationship between basic market conditions,
market structure, conduct, and performance
-Structure Conduct Performance
6. Three criteria that determine the structure of a market Answer: -
Concentration
-Ditterentiation among the products ottered
-Barriers to entry
2/
22
, Contact for further consultation
7. What high market concentration means? Answer: - A few firms with great
market power
-High barriers to entry
-Mobile carriers are more highly concentrated in the united states
-EXAMPLES Answer: verizon, at&t, t mobile
8. What low market concentration means? Answer: - many competitors
-Greater competition
-low barriers to entry
-Examples Answer: retail sectors or online marketplaces where many small players operate
9. CR4, HHI Answer: used to calculate market concentration
10. CR4 (concentration radio) Answer: - Measures the market share accounted for by the
four (eight) largest firms
-If CR4 = or > 50% and if CR8 = or > 75%, the market is considered highly concentrated.
-If CR 4 = 34% to 49 (CR8 = 51% to 74%) Answer: moderately concentrated
-If CR 4 = or < 33% (CR8 = or < 50%) Answer: low concentration
11. Herfindahl- hirschman index (HHI) Answer: - an index of market concentration
found by summing the square of percentage shares of firms in the market
3/
22
Comprehensive Questions
(Frequently Tested) with
Verified Answers Graded
A+
[Document subtitle]
User [Date] [Course title]
, Contact for further consultation
1. Definition of a market Answer: - collection of sellers and buyers
-there are product markets and geographic markets
2. Two dimensions you need to consider when defining a market Answer:
product markets and geographic markets
3. What IO stands for Answer: Industrial Organizational (IO) Model
4. The key premise of the IO model Answer: - Suggests that a firm's external
environment influences its strategic choices.
-Studies the structure of markets where firms compete against one another.
-The IO model is also referred to as the SCP model(Structure Conduct Performance)
5. SCP Paradigm Answer: - Argues that there is a direct relationship between basic market conditions,
market structure, conduct, and performance
-Structure Conduct Performance
6. Three criteria that determine the structure of a market Answer: -
Concentration
-Ditterentiation among the products ottered
-Barriers to entry
2/
22
, Contact for further consultation
7. What high market concentration means? Answer: - A few firms with great
market power
-High barriers to entry
-Mobile carriers are more highly concentrated in the united states
-EXAMPLES Answer: verizon, at&t, t mobile
8. What low market concentration means? Answer: - many competitors
-Greater competition
-low barriers to entry
-Examples Answer: retail sectors or online marketplaces where many small players operate
9. CR4, HHI Answer: used to calculate market concentration
10. CR4 (concentration radio) Answer: - Measures the market share accounted for by the
four (eight) largest firms
-If CR4 = or > 50% and if CR8 = or > 75%, the market is considered highly concentrated.
-If CR 4 = 34% to 49 (CR8 = 51% to 74%) Answer: moderately concentrated
-If CR 4 = or < 33% (CR8 = or < 50%) Answer: low concentration
11. Herfindahl- hirschman index (HHI) Answer: - an index of market concentration
found by summing the square of percentage shares of firms in the market
3/
22
