If a four-firm concentration ratio in an industry equals 75 percent, this implies that
A) 75 percent of all profits in the industry accrue to the leading four firms
B) 25 percent of sales in the industry are accounted for by the four leading firms
C) the four firms represent 75 percent of all the firms in the industry
D) the four firms represent 25 percent of all the firms in the industry
E) 75 percent of all sales in the industry are accounted for by the four leading firms

Question

Quizplus · Accepted Answer

The four-firm concentration ratio measures the total market share of the four largest firms in an industry. A 75 percent ratio means these firms account for 75 percent of all sales, not profits or the percentage of firms in the industry.

If a Four-Firm Concentration Ratio in an Industry Equals 75