A summary of the market for trumpet solos is shown below. What...

Question

A summary of the market for trumpet solos is shown below. What is the four-firm concentration ratio?

Table showing suppliers of trumpet solos and their output in an economics context.

Accepted Answer

Alright, let's try this practice. A summary of the market for trumpet solos is shown below. What is the 4 firm concentration ratio? Ratio? So remember that 4 firm concentration ratio, I'll put CR out of laziness, 4 firm concentration ratio is going to be the output of the 4 largest firms divided by the total industry output. Okay? Industry output. Alright, so there's 2 steps here. 1st we have to find the total industry output and lucky for us, it was given in this problem, right? Total output, they added it up for us already. 17,231 trumpet solos being played. So we've got our total output, we've got our denominator. Now we need to find the 4 largest firms, right? Who is producing the most output? Well, let's go ahead and look for the 4 largest numbers. So they all start with a 2, so I'm gonna look for the next number here, 20 850. Looks like Miles Davis has the highest output in this industry. Let's look for the next highest. It's gonna be Dizzy Gillespie here with 2750. Let me not cross out that number. 2750. Our next highest is is gonna be Lee Morgan with 2,540 and then Louis Armstrong with 24 100 trumpet solos. Cool, so we got to add those four numbers and that's gonna be the output of 4 largest, right. Output 4 largest, Well, that's going to equal 2,400 excuse me. 2,400 plus 28.50 plus 27.50 plus 2540. Alright. So what is that gonna come out to? Pull out my handy dandy calculator. I don't feel like doing mental math right now. 2,400 plus 2850 plus 2750 plus 2540. That gives us 10,540 is the output of the 4 largest. So last step is just to calculate our ratio. Right? So that ratio, so the concentration ratio here, that 4 firm concentration ratio, you're gonna take 10,540 divided by our total output which was given to us here, right, 17,000 231. We just got to do that division and we get 0.6 1 I'll round it off here, 612 which is equal to 61.2 percent right? So right behind my head, 60 1.2% and that means that the top 4 firms in this industry are producing 61% of the total output. Cool? Alright. Let's go on to the next video.

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A summary of the market for trumpet solos is shown below. What is the four-firm concentration ratio?

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