ABSTRACT
The structure of markets and how firms compete have important implications for the macroeconomy in terms of the level of economic activity and its stability. This is not to say that the occurrence of unemployment can be traced to a particular market structure, as Weitzman (1982) and others have argued. Unemployment, as Keynes emphasized, can occur under any market structure, for the demand for labor depends on the demand for its products, and that aggregate demand can be less than is needed for full employment. The full employment output need not be the “profit-maximizing” output or even a profitable output. It depends on the expenditure on products.
