Suppose the market for good X has a four-firm concentration ratio of 0.70.Having worked for the four largest firms in the industry,you know the sales for these four firms are given by $2,000,000,$2,250,000,$2,500,000,and $2,750,000.Based on this information,we know that sales for the remaining firms in the industry are:

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The four-firm concentration ratio of 0.70 (or 70%) means that the four largest firms account for 70% of total sales in the market. The total sales of the four firms are $2,000,000 + $2,250,000 + $2,500,000 + $2,750,000 = $9,500,000. Since this represents 70% of the market, the total market sales are $9,500,000 / 0.70 = $13,571,430. The sales for the remaining firms in the industry are the total market sales minus the sales of the four largest firms: $13,571,430 - $9,500,000 = $4,071,430.

Suppose the Market for Good X Has a Four-Firm Concentration