A four-firm concentration ratio of less than 60 percent indicates
A)a monopoly.
B)a market that is dominated by a few firms.
C)a competitive market.
D)an oligopoly.
E)an absence of competition.

Question

Quizplus · Accepted Answer

A four-firm concentration ratio is calculated by adding up the market share of the four largest firms in a market. A ratio of less than 60 percent indicates that there are many firms operating in the market and no one firm has a dominant market share. This suggests a competitive market with several firms having the ability to compete on the basis of price, quantity, or product differentiation.

A Four-Firm Concentration Ratio of Less Than 60 Percent Indicates