The purpose of calculating the concentration ratio is
A)to obtain the firm's total profit.
B)to obtain the firm's production cost.
C)to measure the losses the firm incurred.
D)to measure the extent to which the market is dominated by a small number of firms.
E)to distinguish between the firm's total profit and production cost.

Question

Quizplus · Accepted Answer

The purpose of calculating the concentration ratio is to measure the extent to which the market is dominated by a small number of firms. This helps identify the degree of competition within an industry and whether there is a risk of monopolistic practices or anti-competitive behavior.

The Purpose of Calculating the Concentration Ratio Is