RELATION OF PROFIT RATE TO INDUSTRY such cases, the Census industry has been rejected from the sample he ground that to overstate the true concentration for the theoretical industry within which the outputs in question fell. The same policy has been followed where there was evidence of a significant supply of imports of close substitute outputs, automatically excluded from Census data For almost all Census industry, however, we have followed the assumption that, geographical difficulties aside, either the industries or their component products represent theoretical industries, but that we do not know which do. We thus do not specifically identify the theoretical industry in most instances. If this is the case, how can we decide whether or not a Census industry concentration measure, computed for the aggregate output of such an industry will tend to represent the concentration measure for the theoretical dustry or industries putatively contained? This question may be analyzed on the assumption, which will not be reiterated throughout that we are dealing only with industries which are free of geographical market segmentation and have not been found overly narrow in definition Occasionally, of course, we find a Census industry with but a single product, and thus by assumption a simple theoretical industry for which the concentration measure may be accepted at face value. This is the case, for example, with matches, locomotives, and ciga rettes. In most cases, however, we have a number of products within the Census industry, and the issue must be faced. Its resolution is quite simple- we need only to identify those Census industries for which the concentration measure is roughly the same both for the Census industry and for each of its principal products. For in these the industry concentration measure will tend to represent the true theoretical concentration for the industry or component industries in question regardless of whether Census product or Census industry is the theoretical entity. The Census industry concentration measure vill in effect be interchangeable with the component product con centration measures when, and only when, there is within the Census ndustry a sort of symmetrically balanced diversification among all products by all firms, instead of narrower product specialization by firms. If there is specialization by firms among products, the aggre- gate concentration measure for the Census industry will generally be lower than the concentration measures for the individual products. 8 8. Thus if in industry X there are three products, a, b, and c, and of each of these firm I produces 60 per cent, firm 2, 30 per cent, and firm 3, 10 per cent he concentration figure for the aggregated output of the industry will be the