Concentration Ratio - Two Common Ratios

Two Common Ratios

  • The Four-Firm Concentration Ratio measures the total market share of the four largest firms in an industry.
  • The Eight-Firm Concentration Ratio measures the total market share of the eight largest firms in an industry.

Usually, these two common ratios are comparable from industry to industry, while concentration ratios for other numbers of firms can be also calculated.

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