Question 31

The four-firm concentration ratio for the companies is 40.

The four-firm concentration ratio, which measures the total market share held by the four largest firms in an industry, is calculated to be 40 in this case.

A) 60

Option A is incorrect because a concentration ratio of 60 would imply that the top four firms hold a larger share of the market than what is reported. This value does not align with the given data regarding the companies' market shares.

B) 40

Option B is correct as it accurately reflects the four-firm concentration ratio, indicating that the combined market share of the four largest firms totals 40%. This value is consistent with the data provided in the context of the question.

C) 452

Option C is incorrect because a concentration ratio of 452 is not feasible within the context of market share calculations, where the maximum possible value is 100%. This figure greatly exceeds the limits of a concentration ratio.

D) 732

Option D is also incorrect, as a concentration ratio of 732 is impossible. Similar to Option C, this number surpasses the maximum threshold for a concentration ratio, rendering it invalid.

Conclusion

The correct answer is definitively 40, as it accurately represents the four-firm concentration ratio based on the market share data. Options A, C, and D fail to meet the criteria for a valid concentration ratio, either by overstating the market share or exceeding the maximum possible value.