There are five firms in an industry with sales at $7 million,$6 million,$3 million,$2 million,and $2 million,respectively.The four-firm concentration ratio is:

Question

Quizplus · Accepted Answer

The four-firm concentration ratio is calculated by adding the sales of the top four firms and dividing by the total sales of all firms. Here, the top four firms have sales of $7 million, $6 million, $3 million, and $2 million, summing to $18 million. The total sales of all five firms are $20 million ($7m + $6m + $3m + $2m + $2m). The concentration ratio is $18 million / $20 million = 0.9.

There Are Five Firms in an Industry with Sales at $7