Question

an industry is comprised of 20 firms, each with an equal market share, what is the four firm concentration ratio of this industry

Answer 1

4-Firm Concentration ratio = 20%

Step-by-step explanation:

Each firm has equal share

That means 100% share of the industry is divided equally among the 20 firm

Share of 1 firm = 100/20 = 5%

4-Firm Concentration ratio = Share of 1 firm * Number of firm

4-Firm Concentration ratio = 0.05 * 4

4-Firm Concentration ratio = 0.2

4-Firm Concentration ratio = 20%