Fig. 1 shows the market shares of three firms in the domestic rail-ticket booking market in 2022. Market share (%)025504631158RailLinkTrackBuyGoTrainOthers©...

Assessment: Economics 9214 | Paper 2 Mock 01 | Written Paper 2 Subject: Economics - 9214

Question 1 Report

Fig. 1 shows the market shares of three firms in the domestic rail-ticket booking market in 2022.

Market share (%)025504631158RailLinkTrackBuyGoTrainOthers© EAGLE BEACON GLOBAL

(a) Show the three-firm concentration ratio for this market. [1]
(b) Which market structure is suggested by the figure? [1]

Answer Details

(a) The three-firm concentration ratio is the combined market share of the three largest firms:

\[46\% + 31\% + 15\% = 92\%\]

Therefore, the three-firm concentration ratio is 92%. [1]

(b) This very high concentration ratio suggests an oligopoly, or concentrated market. [1]

Only three firms account for 92% of sales, so a small number of firms dominate the market.

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