Suppose the 2-Firm Concentration Ratio (Measuring Output)in a Canadian Manufacturing

Multiple Choice

Suppose the 2-firm concentration ratio (measuring output) in a Canadian manufacturing industry is over 90%.Why might the market power of these 2 firms be less than the concentration ratio suggests?

A) The product is purely domestic and there is no international trade.
B) A high concentration ratio usually indicates low degrees of market power.
C) The product is traded internationally and the two Canadian firms compete with many global rivals.
D) The relevant market is regional and so the concentration ratio is not relevant.
E) A 2-firm concentration ratio does not provide enough information.