Ten firms compete in a market to sell product X. The total sales of all firms selling the product are $2,000,000. Ranking the firms' sales from highest to lowest, we find the top four firms' sales to be $270,000, $215,000, $190,000, and $130,000, respectively. Calculate the four-firm concentration ratio in the market for product X.

0.4025

Explanation:

The computation of the four-firm concentration ratio is shown below:

= (1st firm sales + 2nd firm sales + 3rd firm sales + 4th firm sales) : (Total firm sales)

= ($270,000 + $215,000 + $190,000 + $130,000) : ($2,000,000)

= ($805,000) : ($2,000,000)

= 0.4025

We simply divide the top four firm sales by the total firm sale sales