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16 March, 11:57

An industry is composed of 10 firms, all with equal sales. the four-firm concentration ratio in this industry is

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  1. 16 March, 13:18
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    The four-firm ratio is the concentration ratio between the total sales accumulated by the four largest industrial firms to the total sales of all firms present in an industry. This translates to the mathematical expression of

    four-firm ratio = (total sales of four largest firms / total sales)

    Since, we are given that all 10 firms have the same sales, we let the sales be equal to x.

    total sales of four largest firms = 4x

    total sales = 10x

    The ratio is then,

    four-firm ratio = 4/10

    Converting this to percentage will yield us an answer of 40%.
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