Question

You are told that the four-firm concentration ratio in an industry is 20. Based on this information you can conclude that:

Answer 1

When a person is told that the four-firm concentration ratio in an industry is 20 this means that: C. The four largest firms account for 20 percent of industry sales.

What is the four-firm concentration ratio?

The four-firm concentration ratio is a term that refers to the market share of the four largest firms being observed. When the concentration ratio increases, the market industry also experiences a corresponding increment.

Also when this concentration ratio is more than half or 50%, the market can be said to be overly concentrated. So, the response above aptly describes the meaning of the four-firm concentration.

Learn more about market share here:

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