If the four-firm concentration ratio for an industry is 84 percent, this means that
A) there are only four firms competing in the industry 84 percent of the time
B) the four most profitable firms earn an average rate of profit of 84 percent
C) there is an 84 percent probability that the industry is an oligopoly
D) the four leading firms account for 84 percent of industry sales
E) 16 percent of industry sales are of foreign origin, meaning imports

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is a measure of market concentration and indicates the combined market share of the industry's four largest firms. In this case, it means that the four leading firms account for 84 percent of industry sales, suggesting a high level of market concentration, often associated with oligopolistic markets.

If the Four-Firm Concentration Ratio for an Industry Is 84