Most markets are not national markets. The calculations assign the value of all of the sales for a firm to the product group which represents the largest portion of the sales. The ratios included irrelevant sales and exclude relevant sales. Technology Technology affects firm behavior. Technology determines the existence of scale economies.
Demand elasticity limits the pricing practices of industries and firms.
F A measure of industry structure. Potential for Entry Ease of entry determines the number of firms and the extent of competition. Barriers to entry prevent competition from developing. The mark-up of price above marginal cost Firms exercise market power by restricting output and raising price above marginal cost. Integration and Merger Activity Integration is the union of productive resources.