Question

Suppose there are only three firms in a market. The largest firm has sales of $500 million, the second-largest has sales of $300 million, and the smallest has sales of $200 million. The market share of the largest firm is

Answer 1

Answer:

50% share.

Explanation:

Given:

There are only three firms in a market.

The largest firm has sales of $500 million.

The second-largest has sales of $300 million.

The smallest has sales of $200 million.

Question asked:

The market share of the largest firm is ?

Solution:

As we know:

$Market\ share=\frac{Total\ sales\ of\ the\ firm}{Total\ sales\ of\ the \ market} \times100$

Total sales of the largest company = $500 million.

Total sales of the market = Sales of largest firm + Sales of second largest firm+ Sales of smallest firm

Total sales of the market = $500 million + $300 million + $200 million

                                          = $1000 million

$Market\ share=\frac{Total\ sales\ of\ the\ firm}{Total\ sales\ of\ the \ market} \times100$

                       $=\frac{500}{1000} \times100\\ \\ =\frac{50000}{1000} \\ \\ =50\%$

Therefore, the market share of the largest firm is 50%.