Concentration Ratio - Problems

Problems

The definition of the concentration ratio does not use the market shares of all the firms in the industry and does not provide the distribution of firm size. It also does not provide a lot of detail about competitiveness of the industry. The concentration ratios just provide a sign of the oligopolistic nature of an industry and indicate the degree of competition. The Herfindahl index provides a more complete picture of industry concentration than does the concentration ratio.

Read more about this topic:  Concentration Ratio

Famous quotes containing the word problems:

    I have a horror of people who speak about the beautiful. What is the beautiful? One must speak of problems in painting!
    Pablo Picasso (1881–1973)

    The proper method of philosophy consists in clearly conceiving the insoluble problems in all their insolubility and then in simply contemplating them, fixedly and tirelessly, year after year, without any hope, patiently waiting.
    Simone Weil (1909–1943)

    She has problems with separation; he has trouble with unity—problems that make themselves felt in our relationships with our children just as they do in our relations with each other. She pulls for connection; he pushes for separateness. She tends to feel shut out; he tends to feel overwhelmed and intruded upon. It’s one of the reasons why she turns so eagerly to children—especially when they’re very young.
    Lillian Breslow Rubin (20th century)