Question

A company’s market share went from 50 to 40 percent of the total market. Which set of statements about the company's market shares is true?

Option 1: The market share increased by 10%.
Option 2: The market share decreased by 10%.
Option 3: The market share remained unchanged.
Option 4: The market share doubled.

Answer 1

The company's market share decreased by 10% from 50% to 40%. (Option 2)

Step-by-step explanation:

To calculate the change in market share, you can use the formula:

`\[ \text{Change in Market Share} = ((New Market Share - Old Market Share))/(Old Market Share) * 100\%\]`

In this case, the change is:

`\[ \text{Change in Market Share} = ((40\% - 50\%))/(50\%) * 100\% = -20\%\]`

The negative sign indicates a decrease. Therefore, the company's market share decreased by 20%, not increased. This eliminates option 1, which suggests an increase of 10%.

Options 3 and 4 can also be ruled out. The market share clearly changed, so it did not remain unchanged. Additionally, the market share did not double; it decreased from 50% to 40%.

Therefore, option 2 is the accurate statement: the company's market share decreased by 10%. This aligns with the calculated change of -20%, and it accurately represents the shift in the company's market position.(Option 2)