Microeconomics,, 16th Canadian Edition

Problems

11. The following table provides annual sales for the four largest

firms in four industries in Canada. Also provided are total

Canadian and total world sales for the industry. (All figures are

hypothetical and are in millions of dollars.)

a. Suppose Canada does not trade internationally any of the

goods produced in these industries. Compute the four-

firm Canadian concentration ratio for each industry.

b. Rank the industries in order from the most concentrated

to the least concentrated.

c. Now suppose goods in these industries are freely traded

around the world. Are the concentration ratios from part

(a) still relevant? Explain.

Firm

1

Firm

2

Firm

3

Firm

4

Total

Sales

(Canada)

Forestry

products

185 167 98 47

Chemicals 27 24 9 4