Microeconomics: Principles, Problems, & Policies, 20th Edition

Published by McGraw-Hill Education
ISBN 10: 0077660811
ISBN 13: 978-0-07766-081-9

Chapter 13 - Monopolistic Competition and Oligopoly - Review Questions: 2

Answer

Four-firm concentration ratio is defined as the sum of percentage market shares of four largest firms in the industry Total number of watches produced in a year = 100 Here, the market share of the companies are 1. 30/100 *100 = 30% 2. 20/100 *100 = 20% 3. 20/100 *100 = 20% 4. 20/100 *100 = 20% 5. 10/100 *100 = 10% Four-firm concentration ratio = 30+20+20+20 = 90

Work Step by Step

Given that, there are 5 firms that make watches Output levels of the firms are 1. 30 watches per year 2. 20 watches per year 3. 20 watches per year 4. 20 watches per year 5. 10 watches per year
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