What Is the Four-Firm Concentration Ratio If the Four Largest

question 122

Multiple Choice

What is the four-firm concentration ratio if the four largest firms in an industry account for 5 percent,6 percent,7 percent,and 8 percent of total revenue?

• A)26 percent
• B)174 percent
• C)1,680
• D)There is enough information given to answer the question,but none of the answers above are correct.
• E)There is not enough information given to answer the question.

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Definitions:

Effective Interest Rate

A measure of the real cost of borrowing that takes into account the effect of compounding interest in addition to the nominal rate.

Compensating Balance

Compensating Balance is a minimum bank account balance that a borrower must maintain as part of a loan agreement, often used by banks as a requirement for extending a loan.

Interest Rate

The percentage of principal charged by the lender for the use of its money or the return earned on deposited funds.

Effective Interest Rate

The actual return on an investment, taking into account the effect of compounding interest.