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:
“More than a decade after our fellow citizens began bedding down on the sidewalks, their problems continue to seem so intractable that we have begun to do psychologically what government has been incapable of doing programmatically. We bring the numbers down—not by solving the problem, but by deciding it’s their own damn fault.”
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