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Economic Definition of concentration ratio. Defined.

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Term concentration ratio Definition: The proportion of total output in an industry that's produced by a given number of the largest firms in the industry. The two most common concentration ratios are for the four largest firms and the eight largest firms. The four-firm concentration ratio, as such, is the proportion of total output produced by the four largest firms in the industry and the eight-firm concentration ratio is proportion of total output produced by the eight largest firms in the industry.

 

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