Final answer:
Market share is calculated by dividing the number of units sold by a company by the total units sold in the market, expressed as a percentage. The four-firm concentration ratio adds up the market shares of the four largest firms to assess market dominance.
Step-by-step explanation:
To determine market share, one must divide the number of cars sold by the population of the target market. Market share is the percentage of an industry's total sales that a particular company owns. For instance, if the numbers for replacing automobile windshields in a city are given, company market shares can range from figures such as 10%, 8%, or even 42% for a group of companies combined. The four-firm concentration ratio is also used to determine market dominance, which adds up the market shares of the four largest firms. In the provided scenario, the largest four firms owning 16%, 10%, 8%, and 6% respectively gives us a combined concentration ratio of 40%, indicating that these firms have less than half the market and thus not a particularly high concentration ratio.