NISM Certifications · NISM-Series-XV: Research Analyst · Industry Analysis
A research analyst studying an industry finds that the top four firms hold 80% of total industry sales, and each firm's pricing decisions noticeably affect the others. Which market structure does this most closely describe?
This is an oligopoly. A small number of large firms hold most of the market share, and each firm's pricing or output decisions materially affect rivals, creating interdependence. Perfect and monopolistic competition have many sellers, while monopoly has just one.
- APerfect competition
- BMonopolistic competition
- COligopolyCorrect
- DPure monopoly
Explanation
A few large firms controlling most of the market, with interdependent pricing decisions, is the hallmark of an oligopoly. Perfect and monopolistic competition involve many sellers, and a monopoly involves a single seller.
Did you get it right without looking?
One question tells you little. A timed set on Industry Analysis shows your real accuracy, how long you take and where you lose marks.
More Industry Analysis questions
- Using Porter's five forces framework, an analyst finds that a cement industry has many small buyers who each purchase little, with no abilit…
- An analyst studies a sector in which there are many small buyers, but only three large suppliers control a critical raw material with no sub…
- An analyst computes the Herfindahl-Hirschman Index (HHI) for an industry by summing the squares of market shares (in percent). Four firms ho…
- An industry has a very small number of large firms, high capital requirements for entry, and each firm's pricing decision strongly affects t…
- The Herfindahl-Hirschman Index (HHI) is computed as the sum of squared market shares (in percent). An industry has four firms with market sh…
- Four-firm sales in an industry are: Firm A Rs 400 crore, Firm B Rs 300 crore, Firm C Rs 200 crore, Firm D Rs 100 crore, and these four are t…