The concentration ratio of industry is a measure relating to the proportion of the industry's total output that is produced by a small number of firms.

Question

Quizplus · Accepted Answer

The statement is true. The concentration ratio is calculated by adding up the market shares of the largest firms in the industry, and it provides insight into the degree of market power held by those firms. A high concentration ratio indicates that a small number of firms dominate the industry, while a low concentration ratio suggests a more even distribution of market share among firms.

The Concentration Ratio of Industry Is a Measure Relating to the Proportion