Question

Total industry sales are $90 million. The top four firms (A, B, C, and D) account for sales of $15 million, $3.5 million, $1.3 million and $0.8 million, respectively. What is the four-firm concentration ratio? Group of answer choices 9.40 0.23 0.77 0.40

Answer 1

Answer:

correct option is 0.23

Explanation:

given data

sales =  $90 million

account A sale = $15 million

account B sale = $3.5 million

account C sale = $1.3 million

account D sale = $0.8 million

solution

we get her first total sale that is

total sale = $15 + $3.5 + $1.3 +  $0.8

total sale = $20.6 million

so

four-firm concentration ratio is = $\frac{total \ account\ sale }{industry\ sales}$    ..............1

four-firm concentration ratio is = $\frac{20.6}{90}$

four-firm concentration ratio is = 0.228 = 0.23