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Chapter 26: Q. 2 (page 597)

The table below shows recent worldwide market shares of producers of inkjet printers.

a. In this year, what was the four-firm concentration ratio in the inkjet-printer industry?

b. In this year, what was the seven-firm concentration ratio in the inkjet-printer industry?

Short Answer

Expert verified

a. The four-firm concentration ratio is 89percent.

b. the seven-firm concentration ratio is 99percent

Step by step solution

01

Given Information

The given numbers tables

The table indicates the percentage share of worldwide market sales.

02

Explanation (a)

From the table,

A Four-firm Concentration Ratio is the proportion of the consolidated market portions of the four biggest firms to the entire market size determined by adding the market portions of the four biggest firms.

The four-firm concentration ratio is calculated by taking the total percentage share of the top four firms into account.

Hence we have,41+18++17+13=89%

03

Explanation Part (b)

The table is,

Seven-firm Concentration Ratio is the proportion of the consolidated market portions of the seven biggest firms to the entire market size determined by adding the market portions of the seven biggest firms.

Hence we have,41+18+17+13+6+3+1=99%

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