An industry is composed of 10 firms, all with equal sales. The four-firm concentration ratio in this industry is
A)0.40.
B)0.80.
C)10.00.
D)There is not enough information provided to answer this question.

Question

Quizplus · Accepted Answer

Since the industry is composed of 10 firms with equal sales, the four-firm concentration ratio, which measures the total market share of the four largest firms in the industry, would be 0.40 or 40%. This is because each firm has an equal share of 1/10 or 10%, so the top four firms together have 4/10 or 40% of the market.

An Industry Is Composed of 10 Firms, All with Equal