Question

In the market for​ batteries, _________. A. the HHI is greater than​ 2,500, and the market is a monopoly B. many firms with an incentive to collude produce​ batteries, and the market is an oligopoly C. a small number of interdependent firms influence the profits of each​ other, and the market is an oligopoly D. no barriers to entry exist and each firm produces an identical battery so the market is perfectly competitive

Answer 1

Answer:D

Explanation: A perfect competition is characterised by identical product and no barriers to entry. Products are perfect subsistuites.

The HHI index is used to measure the market power and therefore concentration of firms in the market.

An index less than 1000 indicates the firm isn't concentrated

An index between 1000-1800 indicates moderate concentraruon

An index of over 1800 indicates high concentration

An oligopoly is when there are a few numbers of firms in a market that are interdependent.