Suppose that there are two industries,A and B. There are five firms in industry A with sales at $5 million, $2 million, $1 million, $1 million, and $1 million, respectively. There are four firms in industry B with equal sales of $2.5 million for each firm. The four-firm concentration ratio for industry B is:

Question

Quizplus · Accepted Answer

The four-firm concentration ratio for industry B is equal to the market share of the four largest firms, which is (4 x $2.5 million) / (4 x $2.5 million) = 1. Therefore, the answer is B.

Suppose That There Are Two Industries,A and B