The four-firm concentration ratio measures the total market share of the four largest firms in an industry. To calculate the four-firm concentration ratio, we need to add up the market shares of the four largest firms in the industry.
In this case, if there are 20 firms with equal market share, each firm would have a market share of 5% (100% / 20). Since all firms have the same market share, the four largest firms in the industry would each have a market share of 5%.
Thus, the four-firm concentration ratio in this industry would be:
4 x 5% = 20%
So, the four-firm concentration ratio in this industry is 20%. This indicates that the market is relatively unconcentrated, as the four largest firms in the industry only hold a combined market share of 20%.