Market Concentration Ratio Calculator

How concentrated is an industry? The answer starts with the concentration ratio: the combined market share of the top firms. Antitrust lawyers pair it with the Herfindahl-Hirschman Index, which weights big firms more heavily, and regulators on both sides of the Atlantic publish the thresholds that separate competitive markets from concentrated ones.

The Market Concentration Ratio Calculator below covers the full toolkit: CR4 and CR8 from market shares, HHI with the 2023 U.S. guidelines, the 2010 guidelines, and the EU framework, plus a revenue mode that derives shares from raw revenue figures. It interprets every result into market structure, competition level, regulatory risk, and entry barriers.

How concentration is measured

• CR4 = the combined market share of the four largest firms. CR8 extends this to the top eight.
• HHI = the sum of squared market shares of all firms. Squaring gives large firms more weight: a market with one 60% firm scores far higher than one with six 10% firms, even though both have the same CR.

Interpretation bands used on this page: CR4 above 80% is highly concentrated (near monopoly or tight oligopoly), 60-80% an oligopoly, 40-60% moderate, 20-40% low concentration, below 20% effectively competitive. For HHI, the current U.S. DOJ 2023 merger guidelines treat below 1,000 as unconcentrated, 1,000-1,800 as moderately concentrated, and above 1,800 as highly concentrated. The 2010 guidelines (1,500/2,500) and the EU framework (1,000/2,000) are available in the HHI dropdown for comparison.

Worked example

Four firms hold 28%, 22%, 12%, and 8% of a market:

• CR4 = 28 + 22 + 12 + 8 = 70% (oligopoly, low competition)
• HHI = 784 + 484 + 144 + 64 = 1,476 (moderately concentrated under the 2023 guidelines)
• Regulatory risk: high; entry barriers: high

Run these shares through the calculator above and you will get the same reads.

What competitors miss

Rival concentration tools stop at CR4 from shares. None offers CR8. None computes HHI. None has been updated to the 2023 DOJ thresholds: they still quote the old 1,500/2,500 bands or give no bands at all. And none lets you start from revenue figures, which is how market data actually arrives in annual reports. This calculator covers all three metrics, all three frameworks, and both input styles, with regulatory-risk and entry-barrier reads the thin tools never attempt.

Frequently asked questions

What is the difference between CR4 and HHI?

CR4 adds the top four shares; it ignores how the rest of the market is split. HHI squares every firm's share, so it captures whether the top tier is one giant plus small followers or four equal players. Analysts usually quote both.

What HHI level triggers regulatory concern?

Under the 2023 U.S. merger guidelines, markets above 1,800 are highly concentrated and mergers that raise HHI significantly there draw scrutiny. The older 2010 guidelines used 2,500. The EU framework uses 2,000. All three are selectable above.

Can I use revenues instead of market shares?

Yes. Switch to the firm revenues tab, enter total market revenue and the four largest firms' revenues, and the calculator derives the shares, the CR4, and the combined revenue of the top four.

What does a CR4 of 70% mean?

The four largest firms control 70% of the market: an oligopoly with low competition, typically high entry barriers, and elevated regulatory risk for mergers.

Why do CR4 and HHI sometimes disagree?

A moderate CR4 with a high HHI means one dominant firm plus small followers in the top four. A high CR4 with a moderate HHI means the top four are roughly equal. That is exactly why you should compute both.