Question

A concentration ratio indicates the:

a. number of firms in an industry.
b. number of large firms in an industry compared to the number of large firms in another related industry.
c. percentage of total sales accounted for by the (for example) four largest firms.
d. percentage of sellers in an industry relative to the number of buyers.
e. percentage of sellers in an industry protected by barriers to entry relative to the number of sellers that wish to enter.

Answer 1

The correct answer is letter "A": number of firms in an industry.

Step-by-step explanation:

A concentration ratio measures the number of competitors within the same industry. The lowest concentration ratio of a firm, it represents there are more market rivals. The highest the concentration ratio, the lower the number of competitors of the firm. The ratio is expressed in percentage terms. A firm having a 100% concentration ratio is a monopoly.