The relationship between mark-ups, concentration, and profitability

Abstract

This paper is a survey about industrial organizations. We intend to clarify the
state of the art of empirical studies on the industrial competition. Basically, we discuss a
point of view that became consensus in this field about the decreasing competition in concentrated
industries. Then we examine the importance of the barriers to entry to establish
enterprise behaviour and their power to fix prices. Finally, based on the renaissance of classical
economics there is an overview about diversification and the role of the profit rate in a
capitalist economy.

JEL Classification: B25; B20; L00; L10