An industry is composed of 20 firms, all with equal sales. The eight-firm concentration ratio in this industry is
A)0.40.
B)0.32.
C)2.00.
D)This cannot be determined from the information given.

Question

Quizplus · Accepted Answer

The eight-firm concentration ratio is calculated by summing the market shares of the largest eight firms in the industry. Since all firms have equal sales, each firm has a market share of 1/20 or 0.05. Therefore, the concentration ratio for the largest eight firms is 8 * 0.05 = 0.40.

An Industry Is Composed of 20 Firms, All with Equal