The Accompanying Table Shows the Total Dollar Amount of Sales

question 12

Multiple Choice

The accompanying table shows the total dollar amount of sales in 2012 for the four largest firms in the adhesive manufacturing industry. Total industry sales in 2012 were $782,000. Use this table to answer the questions. $\begin{array}{lr}\text { Firm Name }&\text { Dollar Amount of Sales in } 2012\\\text { Ghes R Us, Inc. } & \$ 362,000 \\\text { Ghe Down, Inc. } & \$ 105,000 \\\text { Sticky, Inc. } & \$ 85,000 \\\text { All Ghes, Inc. } & \$ 76,000 \\\text { All other firms in industry combined } & \$ 154,000\end{array}$
-What is the four-firm concentration ratio in this industry?

• A) 20%
• B) 40%
• C) 60%
• D) 80%
• E) 100%

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Definitions:

Perfectly Competitive

A market structure characterized by many buyers and sellers, identical products, and free entry and exit, leading to price determination by supply and demand.

Market Price

The ongoing value for buying or selling a product or service in the free market.

Shut Down

A short-term decision by a firm to cease production when marginal revenue does not cover variable costs, differing from going out of business, which is a long-term decision.

Total Revenues

The entire sum of money earned from selling goods or services prior to deducting any costs.