Concentration Ratio within the beef packing industry has created conditions where 83.5% of the estimated market share is owned by the top four corporations.
In economics, the concentration ratio is a ratio that shows the size of businesses in relation to their industry as a whole. In contrast to one with a ratio close to 100%, which would be obvious in an industry defined by a true monopoly, one with a low concentration ratio would indicate stronger rivalry among the enterprises in that industry.
The market share percentages owned by the biggest specified number of firms in an industry are added to determine the concentration ratio. The concentration ratio, which goes from 0% to 100%, provides information about how competitive a given industry is. The industry may be perfectly competitive if the concentration ratio is between 0% and 50%, which is regarded as a low concentration.
As a general rule, an oligopoly is present when the top five market players account for more than 60% of all market sales. When a single company's concentration ratio equals 100%, the market is said to be monopolised.
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