Answer: A four–firm concentration ratio of 60 percent means the largest four firms in the industry account for 60 percent of sales; a four–firm concentration ratio of 90 percent means the largest four firms account for 90 percent of sales (just add the percentage of sales for the largest four firms).
What is the meaning of a four-firm concentration ratio of 60 percent what is the meaning of a four-firm concentration ratio of 90 percent?, ANS: A four–firm concentration ration of 60 % means the largest four firms in an industry account for 60 % of sales; a four–firm concentration ratio of 90 % means the largest four firms account for 90 percent of sales.
Furthermore, What is the 4 firm concentration ratio?, A four–firm concentration ratio is one way of measuring the extent of competition in a market. It is calculated by adding the market shares—that is, the percentage of total sales—of the four largest firms in the market.
Finally, What is the four-firm concentration ratio How do you interpret the value?, The four–firm concentration ratio is the sum of total sales or the top four firms (OmniCola, Juice-Up, Super Soda, and King Caffeine) divided by the industry total. These four firms account for $1,225 million worth of soft drink sales, which is 61.25 percent of the overall market.
Frequently Asked Question:
What is the maximum value of the 4 firm concentration ratio?
The four–firm concentration ratio stays in the range of 0-1. It is zero when the market share held by top four firms is negligible. It is possible only in perfect competition, a market structure in which there are so many producers that no firm can individually influence the market price.
What is the 4 firm concentration ratio?
A four–firm concentration ratio is one way of measuring the extent of competition in a market. It is calculated by adding the market shares—that is, the percentage of total sales—of the four largest firms in the market.
Which industry has the highest 4 firm concentration ratio?
The “automobiles” category, for example, has a four-firm concentration ratio that suggests the industry is strongly dominated by four large firms (in fact, U.S. production is dominated by three: General Motors, Ford, and Chrysler).
How do you calculate the 4 firm concentration ratio?
Add together the total sales for each of the four largest firms in your selected industry. Then divide that sum by the total sales of the industry. Convert that result to a percentage, and that percentage value is the four-firm concentration ratio.
How do you calculate firm concentration ratio?
The concentration ratio is calculated as the sum of the market share percentage held by the largest specified number of firms in an industry. The concentration ratio ranges from 0% to 100%, and an industry’s concentration ratio indicates the degree of competition in the industry.
How do you interpret the four-firm concentration ratio?
The four–firm concentration ratio stays in the range of 0-1. It is zero when the market share held by top four firms is negligible. It is possible only in perfect competition, a market structure in which there are so many producers that no firm can individually influence the market price.
What is the 4 firm concentration ratio?
A four–firm concentration ratio is one way of measuring the extent of competition in a market. It is calculated by adding the market shares—that is, the percentage of total sales—of the four largest firms in the market.
What is the four-firm concentration ratio quizlet?
The closer the four–firm concentration ratio is to zero, the less concentrated is the industry; the closer the ratio is to 1, the more concentrated is the industry. Concentration ratios provide a very crude measure of the size structure of an industry.
How is a four-firm concentration ratio measured What does a high measure mean about the extent of competition?
How do we measure a four–firm concentration ratio? What does a high measure mean about the extent of competition? adding the percentage of total sales (market shares) of the four largest firms; A high measure determines that competition is limited because the top four firms hold the most power.
How do you calculate the 4 firm concentration ratio?
Add together the total sales for each of the four largest firms in your selected industry. Then divide that sum by the total sales of the industry. Convert that result to a percentage, and that percentage value is the four-firm concentration ratio.
What is the maximum value of the 4 firm concentration ratio?
The four–firm concentration ratio stays in the range of 0-1. It is zero when the market share held by top four firms is negligible. It is possible only in perfect competition, a market structure in which there are so many producers that no firm can individually influence the market price.
What is firm concentration ratio?
The concentration ratio is calculated as the sum of the market share percentage held by the largest specified number of firms in an industry. … If the concentration ratio of one company is equal to 100%, this indicates that the industry is a monopoly.
What is the four firm concentration ratio quizlet?
The closer the four–firm concentration ratio is to zero, the less concentrated is the industry; the closer the ratio is to 1, the more concentrated is the industry. Concentration ratios provide a very crude measure of the size structure of an industry.
What is the meaning of a four-firm concentration ratio of 60 percent?
Answer: A four–firm concentration ratio of 60 percent means the largest four firms in the industry account for 60 percent of sales; a four–firm concentration ratio of 90 percent means the largest four firms account for 90 percent of sales (just add the percentage of sales for the largest four firms).
What is the 4 firm concentration ratio?
A four–firm concentration ratio is one way of measuring the extent of competition in a market. It is calculated by adding the market shares—that is, the percentage of total sales—of the four largest firms in the market.
How do you calculate the 4 firm concentration ratio?
Add together the total sales for each of the four largest firms in your selected industry. Then divide that sum by the total sales of the industry. Convert that result to a percentage, and that percentage value is the four–firm concentration ratio.
What is the 4 firm concentration ratio and the Herfindahl-Hirschman Index HHI?
A four–firm concentration ratio is one way of measuring the extent of competition in a market. We calculate it by adding the market shares—that is, the percentage of total sales—of the four largest firms in the market. A Herfindahl–Hirschman Index (HHI) is another way of measuring the extent of competition in a market.