If an industry has a four-firm concentration ratio of 85 percent,this suggests that the industry:

Question

Quizplus · Accepted Answer

A four-firm concentration ratio of 85 percent indicates that four firms in the industry control 85 percent of the market share. This high concentration ratio suggests that the industry is an oligopoly rather than perfectly competitive or monopolistically competitive. In a perfectly competitive industry, no single firm would have such a significant market share, while in a monopolistically competitive industry, there would be many small firms with relatively equal market shares, resulting in a lower concentration ratio. A monopoly would have a concentration ratio of 100 percent, but a four-firm concentration ratio of 85 percent suggests that there are at least four relatively large firms in the industry.

If an Industry Has a Four-Firm Concentration Ratio of 85