Radfar ratio

In modern economic & industrial organisation theory the Radfar Ratio, named after its creator Kourosh Radfar, PHd student at the University of Sheffield is a measure of the propensity for a firm to leave a perfectly competitive market. Though basic in its form, it gives a general indicator as to the propensity for any firm to exit a perfectly competitive market. The Radfar Ratio was first proposed in "A Theory of the Perfectly Competitve Market Exit Strategy" (2007), written as part of Radfar's investigative work into market structure.

Radfar ratio:

$(M/P)*2*AR-MC$

Where M = overall market power

P = number of firms.

Bibliography:

A Theory of the Perfectly Competitve Market Exit Strategy, K. J. Radfar, (2007) The University of Sheffield