A concentration ratio measures
A) the average size of the firms in the industry.
B) the sales of the three largest firms in the industry minus the costs of these three largest firms in the industry.
C) the share of industry sales accounted for by the largest firms in the industry.
D) the excess capacity found in a particular oligopolistic industry.

Question

Quizplus · Accepted Answer

A concentration ratio measures the share of industry sales accounted for by the largest firms in the industry. It is an indicator of the level of competition in the market and can provide insights into the degree of market power held by the largest firms. It is commonly used in antitrust analysis to identify potentially anti-competitive behavior.

A Concentration Ratio Measures