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A concentration ratio (CR) is the sum of the percentage market shares of (a pre-specified number of) the largest firms in an industry. An n-firm concentration ratio is a common measure of market structure and shows the combined market share of the n largest firms in the market.
For example, a 4-firm concentration ratio measures the total market share of the four largest firms in an industry. 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 ...
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 ...
where Q i is the ratio between the average share of the first firms and the average share of the remaining firms and is the concentration coefficient for the first firms. Although it doesn't capture the peripheral firms like the HHI formula, it works to capture the "core" of the market, and measure the degree of inequality between the size ...
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]
Supposing that firms share all the market, each one with a participation of and market share = / =, then the index can be expressed as = + (), where is the statistical variance of the firm shares, defined as = = where = is the mean of participations. If all firms have equal (identical) shares (that is, if the market structure is completely ...
The goal of many firms is to increase the patronage concentration ratio of its customers to 100%. Some firms set different patronage concentration targets for various classes of customers. This reflects the fact that some types of customers are more profitable than others. This is very similar to market share. Whereas market share describes the ...
CR4, four-firm concentration ratio, a measure of market concentration in economics CR4, a postcode district in the CR postcode area in England Pasir Ris East MRT station (CR4), an upcoming MRT station on the Cross Island Line in Singapore