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In economics, concentration ratios are used to quantify market concentration and are based on companies' market shares in a given industry. ... High concentration 70% ...
In most cases, high market concentration produces undesirable consequences such as reduced competition and higher prices. [2] The market concentration ratio measures the concentration of the top firms in the market, this can be through various metrics such as sales, employment numbers, active users or other relevant indicators. [1]
If the resulting figure is above a certain threshold then economists will consider the market to have a high concentration (e.g. market X's concentration is 0.142 or 14.2%). This threshold is considered to be 0.25 in the U.S., [ 9 ] while the EU prefers to focus on the level of change, for instance that concern is raised if there is a 0.025 ...
In order to calculate the N-firm concentration ratio, one usually uses sales revenue to calculate market share, however, concentration ratios based on other measures such as production capacity may also be used. For a monopoly, the 4-firm concentration ratio is 100 per cent whilst for perfect competition, the ratio is zero. [37]
N-firm concentration ratio, N-firm concentration ratio is a common measure of market structure. This gives the combined market share of the N largest firms in the market. [ 9 ] For example, if the 5-firm concentration ratio in the United States smart phone industry is about .8, which indicates that the combined market share of the five largest ...
The higher the four-firm concentration ratio is, the less competitive the market is. When the four-firm concentration ration is higher than 60, the market can be classified as a tight oligopoly. A loose oligopoly occurs when the four-firm concentration is in the range of 40-60. [21]
Market dominance is the control of a economic market by a firm. [1] A dominant firm possesses the power to affect competition [2] and influence market price. [3] A firms' dominance is a measure of the power of a brand, product, service, or firm, relative to competitive offerings, whereby a dominant firm can behave independent of their competitors or consumers, [4] and without concern for ...
For a single loan, the concentration ratio is simply the proportion of the portfolio the loan represents (e.g. a $100 loan in a $1000 portfolio would have a ratio of 0.1 or 10%) For a whole portfolio, a herfindahl index is used to calculate the degree of concentration to a single name, sector of the economy or country. Separate concentration ...