question archive What happens to the degree of industry concentration if existing firms merge or buy out competitors: a
What happens to the degree of industry concentration if existing firms merge or buy out competitors: a
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What happens to the degree of industry concentration if existing firms merge or buy out competitors:
a. The industry becomes less concentrated,
b. Industry concentration is not affected by mergers or acquisitions,
c. The industry becomes more concentrated.
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The answer is c. The industry becomes more concentrated.
A concentrated market is a market where a small number of firms have a large percentage of the market share. When firms merge or buy other firms in the market, one company is created with a larger market share. This obviously increases industry concentration.
