Suppose that there are two industries, A and B.There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively.There are 4-firms in industry B with equal sales of $2.5 million for each firm.The four-firm concentration ratio for industry B is:

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is calculated by adding up the market share of the top four firms in the industry. Since there are only four firms in industry B and they all have equal sales, each firm has a market share of 25%. Therefore, the four-firm concentration ratio for industry B is 1.0 (25% + 25% + 25% + 25% = 100%).

Suppose That There Are Two Industries, a and B