Manufacturing Industry Evaluation

Manufacturing Industry Evaluation
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To economists, businesses and policy makers the level of competition is a significant issue which may be measured through the use of concentration ratios. Consequently, concentration ratios determine the market size of firms in an industry with the most common measures being four firms and eight firms concentration ratios. The four firm concentration ratio considers the market concentration of the four larges firms in an industry. As the ratio increases competition decreases such that a concentration value of 0 indicates perfect completion while a value of 100 indicates the presence of a monopoly. Market competition is important, because it affects prices and the level of wages. When there is more market competition then market prices reduce. On the other hand, wages are likely to be lower under competition while productivity rises. This paper will look into the level of competition in four industries through the use of the four firm concentration ratio and also the impact of oligopoly on the society.
According to Tucker (2010) an oligopoly market structure falls under imperfect competition whereby few large sellers dominate an industry or market. Nonetheless, there could be differentiated or homogenous product and market entry is difficult. The oligopolistic market structure occurs when competitive firms merge as the industry market grows. This could be due to vertical mergers whereby firms acquire others across a distribution channel while horizontal mergers occur upon the acquisition of firms producing similar goods or offering similar services (Tucker, 2010). Because of their ability to influence prices, they lead to higher prices. Thus, the government may intervene through legislations to minimize their bargaining power.
The women's and girl’s cut & sew d...