Ten firms compete in a market to sell product X. The total sales of all firms selling the product are $2 million. Ranking the firms' sales from highest to lowest, we find the top four firms' sales to be $260,000, $220,000, $150,000, and $130,000, respectively.
a. Calculate the four -firm concentration ration in the market for the product. SHOW all work, including the formula
b. Explain the meaning of the CR4 obtained in part (a) above?
c. Suppose the CR4 is approximately 1%, what can you conclude about the type of market structure in the industry? (hint: competitive or monopolistic?). Explain.