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:

    “The Settlement ... is an experimental effort to aid in the solution of the social and industrial problems which are engendered by the modern conditions of life in a great city. It insists that these problems are not confined to any one portion of the city. It is an attempt to relieve, at the same time, the overaccumulation at one end of society and the destitution at the other ...”
    —Jane Addams (1860–1935)

    “Imagination is a valuable asset in business and she has a sister, Understanding, who also serves. Together they make a splendid team and business problems dissolve and the impossible is accomplished by their ministrations.... Imagination concerning the world’s wants and the individual’s needs should be the Alpha and Omega of self-education.”
    —Alice Foote MacDougall (1867–1945)

    “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)