If there are two large firms,each with one-quarter of the market,and 10 firms,each with one-twentieth of the market,in an industry,the market four-firm concentration ratio will be:

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is the percentage of the market share held by the top four firms in the industry. 
In this case, the two large firms each have 25% market share, which adds up to 50%. The remaining 10 firms each have 5% market share, which adds up to another 50%. 
Therefore, the top four firms (the two large firms and two of the smaller firms) have a total market share of 50% + 5% + 5% = 60%. 
Therefore, the four-firm concentration ratio is 60%.

If There Are Two Large Firms,each with One-Quarter of the Market,and