The four-firm concentration ratio for an industry is
A)the number of firms in the industry, divided by four.
B)the share of industry output sold by the four largest firms in the industry.
C)the percentage of total industry profits claimed by the four largest firms.
D)the share of industry output sold by the fourth largest firm in the industry.

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is a measure of market concentration that calculates the combined market share of the four largest firms in the industry. It is calculated by adding the market share percentages of the four largest firms in the industry. Therefore, choice B - the share of industry output sold by the four largest firms in the industry - is the correct answer.

The Four-Firm Concentration Ratio for an Industry Is