The largest firm in Industry J has a 90% market share,while the remaining ten firms each has a one percent share.The largest firm in industry K has a 80% market share,while the other two firms each has a 10% share.Which statement is true?

Question

Quizplus · Accepted Answer

The concentration ratio is the percentage of market share held by the largest firm or firms in the industry. In Industry J, the largest firm has a 90% market share, which alone makes up the concentration ratio for the industry. In contrast, Industry K's largest firm has a 80% market share, leaving the remaining 20% to be divided between two other firms. Therefore, Industry J has a higher concentration ratio than Industry K.

The Largest Firm in Industry J Has a 90% Market