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Business, 30.03.2020 22:44 Chloe0095

Gibrat's Law of Proportionate Growth says that the probability of growing by a certain percentage over a given period of time is independent of initial asset size. An industry governed by such a law will exhibit a lognormal distribution for firm size. Why do we care?
A. The predictions of Gibrat's Law perfectly match those of the Cournot oligopoly model.
B. In the data, firm size for many mature industries appears to be lognormal distribution is perfectly flat.
C. In the data, firm size is roughly symetrically distributed, and the lognormal distribution is perfectly flat.
D. In the data, smaller/younger firms' sizes appear to be lognormally ditributed.

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