Question

Cencentration Ratio- Suppose you have an industry with 20 firms and the cr is 20% how would you describes this industry

Answer 1

The concentration ratio is usually thought of as the percent of an industry (i.e., market share) made up of the top 4 (sometimes 5) firms in the industry. If 4/20 = 20% of the firms make up 20% of the industry, then the all firms in the industry must be very close in size and the industry is likely to be highly competitive.