Market share measures a firm's external performance relative to that of its competitors.Which of the following represents how a firm measures market share?
A)Multiplying the firm's sales by the industries total sales.
B)Dividing the firm's sales by the total market sales for the entire industry.
C)Subtracting your competitors' sales from your total sales.
D)Subtracting the industries total sales from the firm's total sales.

Question

Quizplus · Accepted Answer

Market share is measured by dividing the firm's sales by the total market sales for the entire industry. This gives a percentage that represents the portion of the market that the firm holds. Option A is incorrect as it gives the total sales of the industry, not the market share of the firm. Option C and D are incorrect as they involve comparing sales figures of the competitors, which is not what market share measures.

Market Share Measures a Firm's External Performance Relative to That