chapter  5
Market Structure
Pages 30

The previous two chapters have focused attention on the firm, and particularly on large diversified companies. This emphasis on the behaviour and performance of the firm as a whole is justified by the high proportion of manufacturing activity which is now accounted for in all industrialised countries by a relatively small number of companies. However, firms do of course operate in markets and their behaviour can be expected to be influenced by the structure of these markets. Therefore, we turn in this chapter to examining the main structural features of individual markets. One problem which immediately arises is that of defining the market; in principle a market consists of all the firms which produce a particular product, but the need to find a definition of the market which both makes economic sense and can be used in empirical work is a recurrent problem.