Industry structure is often measured by computing the Four-Firm
Concentration Ratio. Suppose you have an industry with 20 firms and
the CR is 30%. How would you describe this industry? Suppose the
demand for the product rises and pushes up the price for the good.
What long-run adjustments would you expect following this change in
demand? What does your adjustment process imply about the CR for the
industry?
Now consider that the industry has 20 firms but the CR for the
industry is 80% instead of 30%. How would you describe this industry?
What are some reasons why this industry has a high CR while the other
industry had a low CR? Is it possible for smaller firms to thrive and
profit in such an industry? How? Contrast the effects on market
efficiency if the dominating firms use a price leadership model versus
a contestable markets model. Be sure to show your work.

can you please give me an answer to the qustionID: 537591

An industry with 20 firms and the CR of 30%, from a market structure
standpoint, if the four firm concentration ratios is less than 40% it
is monopolistic competition. If the industry has 20 firms but the CR
for the industry is 80% instead of 30%, from a market structure
standpoint, if the four firm concentration ratio is greater than 40%
the market is an oligopoly. For some industries, few firms may be
currently operating in the market but competition might be fierce,
with firms regularly entering and exiting the industry. Even potential
entry might be enough to maintain competition. Price leadership is a
situation in which a market leader sets the price of a product or
service, and competitors feel compelled to match that price. The
theory of contestable markets suggests that even if there is only one
seller, the seller may be forced to act as if there were many more.
Sellers have the incentive to act in this way because it will increase
profits. The key to their success is their ability to restrict sales.
A perfectly contestable market is one in which entry and exits are
absolutely costless.