Concentration Ratio (C.R)

Concentration ratio measures the share that the largest company have of the total market of output and reveals the extent of the domination by those large companies

1. Market C.R can be measures by the concentration ration
2. The numbers of firm’s concentration ration is market share of the number of largest firms in industries

Example: For an Industry:

Industry turnover = 50 million

The 5 largest companies share = 35 million

Concentration Ration (CR) 5 = {(35/50)*100}

                                               = 70%