Concentration ratios
A) have high values for perfect competition.
B) measure the concentration of a large number of firms in a certain area.
C) measure whether the market is dominated by a small number of firms.
D) refer to the concentration of customers in a certain area.
E) measure how concentrated a firm's sales are among certain types of goods.

Question

Quizplus · Accepted Answer

Concentration ratios measure whether the market is dominated by a small number of firms. They are used to assess the degree of competition within specific industries by measuring the percentage of output produced by the largest firms in the industry. Higher concentration ratios indicate less competition and more market power for the dominant firms.

Concentration Ratios