Refer to Table 25.2. Assume there are only four firms in the pool sweeper industry. What is the market share for North Star?
A) 20 percent.
B) 50 percent.
C) 10 percent.
D) 5 percent.

Question

Refer to Table 25.2. Assume there are only four firms in the pool sweeper industry. What is the market share for North Star?
A) 20 percent. 
B) 50 percent. 
C) 10 percent. 
D) 5 percent.

Quizplus · Accepted Answer

To calculate market share, you need to add up the sales/revenue of all firms in the industry and then divide the sales/revenue of the specific firm in question by that total. In this case, the total sales/revenue for all four firms in the pool sweeper industry is $100 million ($30 million + $20 million + $40 million + $10 million). North Star's sales/revenue is $50 million, and when you divide that by the total industry sales/revenue ($100 million), you get a market share of 50 percent.