Question

If the four largest firms in an industry produce 20, 10, 7, and 3 units of output, respectively, and total industry output is 100 units, then the four-firm concentration ratio equals ______. Multiple choice question. 25% 40% 75% 0.4%

Answer 1

40%

Step-by-step explanation:

The four firm concentration ratio calculates the concentration ratio of the 4 largest firms in an industry.

Four firm concentration ratio = 0.2 + 0.1 + 0.07 + 0.03 = 0.4 = 40%