A concentration ratio gives
A) the average size of the firms in an industry.
B) the total sales of four or eight of the mid-sized firms in the industry.
C) the percentage of all sales contributed by the four or eight largest firms in the industry.
D) the sales of the four largest firms in the industry divided by the sales of the eight largest firms in the industry.

Question

Quizplus · Accepted Answer

A concentration ratio measures the percentage of all sales in an industry that are accounted for by the top four or eight firms. It does not provide information about the average size of firms or the total sales of mid-sized firms. Choice D is incorrect because it compares the sales of only the top four and top eight firms, rather than expressing their sales as a percentage of total industry sales.

A Concentration Ratio Gives