However, once an industry drops to a symmetric firm number of 10, concern is warranted. One factor is the nature of interaction among firms. A related issue is whether the goods produced by different firms are different or alike. Product differentiation is linked to how demand changes as price changes. Firms can affect the price and rival behavior.
More elasticity reduces the ability to manipulate outcomes.
International trade affects the exercise of market power. Domestic firms with market power cannot raise their prices if they face either the threat of import competition or the loss of export markets. The cost structure of an industry affects pricing. Large fixed costs and entry barriers limit potential competition and enhance market power. Fixed capacity constrains the reaction of rival firms.