This document discusses how to measure industry concentration to determine the market structure of an industry. There are two main measures: 1. Concentration ratio - Measures the percentage of total industry output produced by the largest 4 firms. A ratio over 40% indicates an oligopolistic market structure. 2. Herfindahl Index - Calculates the sum of the squared market shares of all firms in an industry. It ranges from 0 to 10,000 with scores over 1,800 indicating high concentration. The document provides examples calculating both measures using hypothetical industry data. It interprets the results and explains how the Herfindahl Index improves on the concentration ratio by accounting for differences in the distribution of market shares among firms.