Forey, inc. competes against many other firms in a highly competitive industry. over the last decade, several firms have entered this industry and, as a consequence, forey is earning a return on investment that roughly equals the interest rate. furthermore, the four-firm concentration ratio and the herfindahl-hirschman index are both quite small, but the rothschild index is significantly greater than zero. based on this information, which market structure best characterizes the industry in which forey competes? explain.

The market that characterizes the industry in which Forey competes is a market where competition is at its greatest possible level and it is a perfectly competitive market and the reason is because its returns decrease with the entering of new firms, also four-firm concentration ratio and Herfindahl Hirschman index are both quite small, so no one has significant market power to set or even influence the market price. In the short-run Forey Inc’s profit will decrease as more and more new firms enter the market and in the long-run Forey Inc will receive only normal (zero) economic profit.

the u.s. census bureau produces data on the population and economy nationwide. it can you to analyze the kind of people living in your neighborhood. it does not show you the market of people willing to buy your product or an existing market for your product. that will require more market research. the census bureau only gives you an insight to the demographics in your area.