What chart type would you use to represent market shares of different companies within a sector?

What chart type would you use to represent market shares of different companies within a sector?

• A. Bar chart
• B. Pie chart
• C. Line chart
• D. Scatter plot

Answer: (B)

Using a pie chart to represent market shares of different companies within a sector is appropriate because this chart type visually displays parts of a whole. A pie chart allows viewers to quickly see the proportions of each company's market share relative to the entire sector, making it easy to identify which companies hold larger or smaller portions of the market. The circular representation helps emphasize how the individual market shares compare to the total market, and it can effectively highlight significant differences in market share among companies. This makes it a suitable choice when the goal is to communicate the composition of a dataset, especially when there are a limited number of categories involved. In contrast, while bar charts can also be used to display similar data, they emphasize comparisons between categories and may not convey the concept of parts of a whole as intuitively as a pie chart does. Line charts are best suited for showing trends over time, and scatter plots are ideal for displaying relationships between two numerical variables, neither of which effectively highlights market share distributions.

Using a pie chart to represent market shares of different companies within a sector is appropriate because this chart type visually displays parts of a whole. A pie chart allows viewers to quickly see the proportions of each company's market share relative to the entire sector, making it easy to identify which companies hold larger or smaller portions of the market.

The circular representation helps emphasize how the individual market shares compare to the total market, and it can effectively highlight significant differences in market share among companies. This makes it a suitable choice when the goal is to communicate the composition of a dataset, especially when there are a limited number of categories involved.

In contrast, while bar charts can also be used to display similar data, they emphasize comparisons between categories and may not convey the concept of parts of a whole as intuitively as a pie chart does. Line charts are best suited for showing trends over time, and scatter plots are ideal for displaying relationships between two numerical variables, neither of which effectively highlights market share distributions.