If an industry has 16 firms of equal size, and each produces and sells the same quantity of output at the same price, what is the four-firm concentration ratio of this industry?
A) 16 percent
B) 18 percent
C) 22 percent
D) 25 percent
E) not enough information to determine

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is calculated by taking the output of the largest four firms in the industry and dividing it by the total output of the industry. Since all 16 firms are of equal size and produce the same quantity, the largest four firms would account for 4/16 or 1/4 of the total industry output, which is 25 percent.

If an Industry Has 16 Firms of Equal Size, and Each