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In economics, market concentration is a function of the number of firms and their respective shares of the total production (alternatively, total capacity or total reserves) in a market. [1] Market concentration is the portion of a given market's market share that is held by a small number of businesses.
Perfect competition exists where an industry's concentration ratio is CR n = n/N, where N is the number of firms in the industry. That is, all firms have an equal market share. Low concentration – 40% A concentration ratio of close to 0% implies perfect competition at the least. This is only possible in an industry where there is a very large ...
In the Solow-Swan model, economic growth is driven by the accumulation of physical capital until this optimum level of capital per worker, which is the "steady state" is reached, where output, consumption and capital are constant. The model predicts more rapid growth when the level of physical capital per capita is low, something often referred ...
In order to calculate the N-firm concentration ratio, one usually uses sales revenue to calculate market share, however, concentration ratios based on other measures such as production capacity may also be used. For a monopoly, the 4-firm concentration ratio is 100 per cent whilst for perfect competition, the ratio is zero. [37]
If the resulting figure is above a certain threshold then economists will consider the market to have a high concentration (e.g. market X's concentration is 0.142 or 14.2%). This threshold is considered to be 0.25 in the U.S., [ 9 ] while the EU prefers to focus on the level of change, for instance that concern is raised if there is a 0.025 ...
In contrast, the 'value composition of capital' is the ratio between the value of the elements of constant capital involved in production and the value of the labor. Marx found that the special concept of 'organic composition of capital' was sometimes useful in analysis, since it assumes that the relative values of all the elements of capital ...
The growth accounting procedure proceeds as follows. First is calculated the growth rates for the output and the inputs by dividing the Period 2 numbers with the Period 1 numbers. Then the weights of inputs are computed as input shares of the total input (Period 1). Weighted growth rates (WG) are obtained by weighting growth rates with the weights.
Major topics include measurement of economic performance, national income and price determination, fiscal and monetary policy, and international economics and growth. AP Macroeconomics is frequently taught in conjunction with (and, in some cases, in the same year as) AP Microeconomics as part of a comprehensive AP Economics curriculum, although ...