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Suppose a ten firm industry has total salos of $35 millon per year. The largest firm have sales of $10 million, the third largest firm has sales of $4 milion, and the fourth largest firm has sales of $2 million If fifth through tenth largest firms combined have annual sales of $12 million, the four - firm concentration ratio for this industry is O A. 45.7 percent. OB. 65.7 percent. O C. 80 percent D. none fo the above.
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Answer #1

Total market value of industry = $ 36 million

1st firm = $ 10 million

3rd firm = $ 4 million

4th firm = $ 2 million

5th to 10th firm = $ 12 million

Market captured by first 4 firms = $ 36 - 12 = $ 24 million

The four firm concentration ratio = ($24/36)*100

= 0.667 *100

= 66.7%

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