Question

The output in chairs per month for four firms is:

200 for firm A
300 for firm B
275 for firm C
320 for firm D
The total output of the chair industry is 2,000 chairs per month. If firms A, B, C, and D are the four largest firms in the industry, calculate the four-firm concentration ratio for the chair industry by finding out what percentage of the total output the four firms are responsible for. Round your answer to the nearest whole percent.
What is the %?

Answer 1

0.5475 or 54.75%

Step-by-step explanation:

Data provided in the question:

The output in chairs per month for four firms

Firm A = 200

Firm B = 300

Firm C = 275

Firm D = 320

Total output of the chair industry = 2,000 chairs per month

Now,

Total output of four large firms = 200 + 300 +275 + 320

= 1,095 chairs

The four-firm concentration ratio for the chair industry

=
`\frac{\textup{Total chairs from four large firms}}{\textup{Total production of the industry}}`

=
`\frac{\textup{1,095}}{\textup{2,000}}`

= 0.5475

or

= 0.5475 × 100%

= 54.75%