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Gibrat's Law of Proportionate Growth says that the probability.f of growing by a certain percentage over a given period of time is independent of initial
Gibrat's Law of Proportionate Growth says that the probability.f of growing by a certain percentage over a given period of time is independent of initial asset size. An industry.r governed by such a law will exhibit a iognormal distribution for firm size. Why do we care? r L; A} In the data. smallerf'grounger firms' sizes appear to be lognormally distributed \"'5 . . L: B} The predictions of Gibrat's Law perfectly match those of the Cournot oligopoly model. \"1...! Cl in the data. firm size for mam;I mature industries appears to be lognormally distributed. K: D] In the data. firm size is roughiy symmetrically- distributed. and the iognormal distribution is perfectly flat. Market structure can vary both across industries and over time. True O FalseStage 4 of the product life cycle lends some credence to the Second Chicago School's explanation of the relationship between concentration and profitability True O False
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