Industry concentration affects the intensity of competition in an industry.

A. True

B. False

• The statement is true.

Industry concentration can be described as the distribution of the market share in a specific industry. That is to say, an industry with high concentration means that there are few firms that have a significant portion of the market share. On the contrary, low concentration means that many firms in the industry have a small portion of the market share. Therefore, high concentration limits the competition since the market control is held by a few firms and low concentration leads to competitive markets because there are many similar firms that compete to increase their sales.