Question 1 Report
Fig. 1 shows the market shares of three firms in the domestic rail-ticket booking market in 2022.
(a) Show the three-firm concentration ratio for this market. [1]
(b) Which market structure is suggested by the figure? [1]
(a) The three-firm concentration ratio is the combined market share of the three largest firms:
\[46\% + 31\% + 15\% = 92\%\]
Therefore, the three-firm concentration ratio is 92%. [1]
(b) This very high concentration ratio suggests an oligopoly, or concentrated market. [1]
Only three firms account for 92% of sales, so a small number of firms dominate the market.
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