The pattern of market shares in an industry. This is concerned with how many firms there are, and how they vary in size. Two common measures used in describing market structure are the N-firm concentration ratio, n-firm and the Herfindahl index. The five-firm concentration ratio, for example, shows the total market shares of the largest five firms as a proportion of the whole market. This has defects; there is a lot of difference between a market in which the largest firm has 82 per cent of all sales and the next four firms have 2 per cent each, and a market in which five equal firms have shares of 18 per cent; yet each produces a five-firm concentration ratio of 0.9. The Herfindahl index works by adding the squares of the proportional shares of all firms. If there are N firms, the largest possible Herfindahl index approaches a maximum of 1 as the biggest firm has nearly all the sales and the rest minute amounts, and a minimum of 1/N if all firms have equal market shares. Both measures are completely static; a more dynamic approach to market structure might enquire how far the leading places tend to be occupied by the same firms, and how fast the identity of the market leaders changes.

• confidence, consumer
• confidence interval
• congestion
• conglomerate
• conglomerate merger
• conjectural variation
• conjugates, complex
• conomic welfare, net
• conservative central banker
• conservative social welfare function
• consistent preferences
• consolidated accounts
• Consols
• consortium
• conspicuous consumption
• constant
• constant elasticity of substitution
• constant of integration
• constant prices
• constant returns
• constrained maximum
• constrained minimum
• constraint
• consultant
• consumer