00:01
Let's talk about how to calculate the four -firm ratio and what it means.
00:06
So the four -firm ratios calculated by looking at that firms who have the highest share of the market.
00:18
So, for example, in this case, we have firms a, b, c, d, and they each respectively own 25, 22, 20, and 18 % of the market.
00:33
So what we're doing here is just adding up these numbers.
00:39
So if we add them up, we get 15, 85.
00:50
So these four firms produce or own 85 % of the market.
00:57
And this is huge.
00:59
That means that in this market, 85 % of the goods that are kind of sold and bought come from these four firms...