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:
“To be a philosopher is not merely to have subtle thoughts, nor even to found a school, but so to love wisdom as to live according to its dictates a life of simplicity, independence, magnanimity, and trust. It is to solve some of the problems of life, not only theoretically, but practically.”
—Henry David Thoreau (1817–1862)
“The question of place and climate is most closely related to the question of nutrition. Nobody is free to live everywhere; and whoever has to solve great problems that challenge all his strength actually has a very restricted choice in this matter. The influence of climate on our metabolism, its retardation, its acceleration, goes so far that a mistaken choice of place and climate can not only estrange a man from his task but can actually keep it from him: he never gets to see it.”
—Friedrich Nietzsche (1844–1900)
“Grandparents can be role models about areas that may not be significant to young children directly but that can teach them about patience and courage when we are ill, or handicapped by problems of aging. Our attitudes toward retirement, marriage, recreation, even our feelings about death and dying may make much more of an impression than we realize.”
—Eda Le Shan (20th century)