Definition
- Concentration ratio
- A concentration ratio measures the combined market share, or percentage of total industry sales, of the largest firms in a market.
- Not to be confused with: Market share
- Market share is each firm's proportion of total sales in a market, usually given as a percentage.
Test yourself
What is the difference between concentration ratio and market share?
Market share belongs to one firm; a concentration ratio adds up the shares of the largest few.