Market Concentration

Why it matters

• High levels of concentration can lead to oligopolistic structures where firms possess significant market power to influence prices.
• It serves as a key indicator for competition regulators to assess the potential for anti-competitive practices and barriers to entry.
• Excessive concentration may result in reduced consumer choice, lower innovation incentives, and potential exploitation of supply chains.

How it is asked

Candidates should focus on the relationship between market concentration and the mandate of competition authorities, specifically how the Herfindahl-Hirschman Index is used to evaluate merger control and the prevention of abuse of dominant position.