Principles of Microeconomics / Unit 9 MIC 0817 short lesson, about 20 seconds
Measuring Concentration: The Four-Firm Ratio
Captions available
The idea
The four-firm concentration ratio adds the market shares of the four largest firms. Near one hundred means a tight oligopoly; near zero means many small firms.
In practice
Shares of thirty, twenty-five, twenty and ten give a ratio of eighty-five.
Where people slip
It ignores how the four shares are split, and everything below the fourth firm.
Your place on the trail
Every lesson rests on earlier ones and opens later ones. Tap any to jump.
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