Long-run - short answer
Explain why all the firms in an industry within a single economy are not all the same size.
Explain why firms are bigger in some industries than others.
Explain how full exploitation of the benefits of economies of scale and the division of labour can result in a firm having to become international/multinational.
An industry has 12 firms that operate within it. The market shares of the top 6 firms in 2002 are given below.
|Market share (%)||24||21||16||12||8||6|
Calculate the 3, 5 and 6 firm concentration ratios (the percentage market share accounted for by the top 3, top 5 and top 6 firms) for this industry.
An industry has 24 firms that operate within it. The sales value of the top 6 firms in 2002 is given below.
|Sales value ($m per year)||12.5||2.5||2.3||1.7||0.9||0.8|
The industry is worth $24 million per year
Calculate the 3, 5 and 6 firm concentration ratios for this industry.
Explain three economies and three diseconomies of scale that may affect a firm.
Explain the term 'capital intensive' firm.
Why do capital-intensive firms tend to be large in relation to the size of the market they are in?
Explain the term 'minimum efficient scale of production'.