Concentration levels[edit]

Concentration ratios range from 0 to 100 percent. The levels reach from no, low or medium to
high to "total" concentration.
[1]

No concentration
0% means perfect competition or at the very least monopolistic competition. If for
example CR4=0 %, the four largest firm in the industry would not have any significant
market share.
Low concentration
0% to 50%. This category ranges from perfect competition to an oligopoly.
Medium concentration
50% to 80%. An industry in this range is likely an oligopoly.
High concentration
80% to 100%. This category ranges from an oligopoly to monopoly.
Total concentration
100% means an extremely concentrated oligopoly. If for example CR1= 100%, there
is a monopoly.

Problems[edit]
The definition of the concentration ratio does not use the market shares of all the firms in the
industry and does not provide the distribution of firm size. It also does not provide a lot of
detail about competitiveness of the industry. The concentration ratios just provide a sign of
the oligopolistic nature of an industry and indicate the degree of competition.[1][3] The
Herfindahl index provides a more complete picture of industry concentration than does the
concentration ratio.

Concentration ratios in United Kingdom[edit]

UK industries with the highest five-firm concentration ratios include the following:[5]

Sugar: 99%

Tobacco products: 99%

Gas distribution: 82%

Oils and fats: 88%

Confectionery: 81%

Man-made fibres: 79%

Coal extraction: 79%

 Soft drinks and mineral waters: 75%

Pesticides: 75%

Weapons and ammunition: 77%

UK industries with the lowest five-firm concentration ratios include the following:[5]

Metal forging, pressing etc.: 4%

Plastic products: 4%

Furniture: 5%

Construction: 5%

Structural metal products: 6%

Wholesale distributions: 6%

General purpose machinery: 8%

Wood and wood products: 9%