Table 12.1
-Refer to Table 12.1.If Firms L and M were to merge,the four-firm concentration ratio would
A) rise to 71%.
B) fall to 82%.
C) fall to 40%.
D) rise to 82%.

Question

Table 12.1
-Refer to Table 12.1.If Firms L and M were to merge,the four-firm concentration ratio would
A) rise to 71%. 
B) fall to 82%. 
C) fall to 40%. 
D) rise to 82%.

Quizplus · Accepted Answer

If Firms L and M were to merge, the market share of the resulting firm would be 45% + 20% = 65%. Therefore, the four-firm concentration ratio would rise to 82%. This is because the four-firm concentration ratio measures the combined market share of the four largest firms in the market, and a merger between two of those firms would increase their combined market share.

Table 12.1 -Refer to Table 12.1.If Firms L and M Were to Were