Suppose there are only three firms in a market.The largest firm has sales of $500 million,the second-largest has sales of $300 million,and the smallest has sales of $200 million.The market share of the largest firm is
A)50 percent.
B)100 percent.
C)60 percent.
D)40 percent.

Question

Quizplus · Accepted Answer

The market share of the largest firm is calculated by dividing its sales by the total sales of all firms in the market. The total sales in the market are $500 million + $300 million + $200 million = $1000 million. The market share of the largest firm is $500 million / $1000 million = 0.5 or 50%.

Suppose There Are Only Three Firms in a Market