Definition
A three-firm (or four-firm) concentration ratio is the total (sum) of the market shares held by the top three (or four) competitors in a market.[1]
Concentration ratios can be measured for any given number of the top competitors, with Wikipedia listing four and eight as the most common.
References
- ^ Farris, Paul W.; Neil T. Bendle; Phillip E. Pfeifer; and David J. Reibstein (2010). Marketing Metrics: The Definitive Guide to Measuring Marketing Performance (Second Edition). Upper Saddle River, New Jersey: Pearson Education, Inc.