1. Suppose that the distribution of sales within an industry is as shown in the
ID: 1179568 • Letter: 1
Question
1. Suppose that the distribution of sales within an industry is as shown in the table.
Firm
Share of Total Market Sales
A
25
B
20
C
15
D
14
E
8
F
6
G
5
H
5
I
2
Total
100%
a) What is the four-firm concentration ratio for this industry? ___74%_
b) What is the eight-firm concentration ratio for this industry? _____98%
Firm
Share of Total Market Sales
A
25
B
20
C
15
D
14
E
8
F
6
G
5
H
5
I
2
Total
100%
Explanation / Answer
a) its the share of top 4 firms which is 25 + 20 + 15 + 14 = 74%
b) its the share of top 8 firms which is 25 + 20 + 15 + 14 + 8 + 6 + 5 + 5 = 98%
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