concentration ration

• A concentration ratio is a tool to help us categorize a market structure
• What does a concentration ratio measure?

  Market share of largest firms
• In a concentration ratio, 'n' represents the number of firms
• The four-firm concentration ratio considers the market share of the top four largest firms.
• What is the four-firm concentration ratio if the market shares of the top four firms are 25%, 10%, 15%, and 20%?

  70%
• When calculating a concentration ratio, the term 'others' should be ignored
• In the global soft drink industry, what is the two-firm concentration ratio if Coca-Cola has 49% and Pepsi has 22% market share?

  71%
• The two-firm concentration ratio in the soft drink industry is lower than the four-firm concentration ratio.
• A concentration ratio reveals the individual market share of the largest firm in the industry.

  False
• A six-firm concentration ratio in the energy industry with market shares totaling 92% is written as 6: 92
• What does a high concentration ratio indicate about market dominance?

  Market is dominated by few firms