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Chapter 11: Q. 35 (page 273)

Use Table 11.5to calculate the four-firm concentration ratio for the U.S. auto market. Does this indicate a concentrated market or not?

Table 11.5Global Auto Manufacturers with Top Four U.S. Market Share, June 2013 (Source: http://www.zacks.com/commentary/27690/autoindustry-stock-outlook-june-2013

Short Answer

Expert verified

61is the FFC ratio.

Step by step solution

01

Step 1. Introduction

Four firm concentration ratios: It reveals that four of the major companies control the market.

02

Step 2. Explanation

The four-firm concentration ratio (FFC) is determined by aggregating the four firms' market shares.

GIVEN: The following are the market shares of four companies:

61is the FFC ratio.

It denotes that the market is somewhat concentrated, implying that it is not very competitive.

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