The largest firm in Industry J has a 90% market share,while the remaining ten firms each has a one percent share.The largest firm in industry K has a 80% market share,while the other two firms each has a 10% share.Which statement is true?

A) Industry J has a higher concentration ratio than industry K.
B) Industry K has a higher concentration ratio than industry J.
C) The industries have the same concentration ratio.
D) None of these statements are true.

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Gaayathri Aani Vel · Accepted Answer

Final Answer : A, Explanation :  The concentration ratio is the percentage of market share held by the largest firm or firms in the industry. In Industry J, the largest firm has a 90% market share, which alone makes up the concentration ratio for the industry. In contrast, Industry K's largest firm has a 80% market share, leaving the remaining 20% to be divided between two other firms. Therefore, Industry J has a higher concentration ratio than Industry K.

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