Larger firms can achieve more internal economies of sale. Large domestic firms are then more able to compete against large foreign multinationals. Diversified firms no longer have 'all their eggs in one basket'. Reduce competition by removing rivals. Some products have only a limited demand, eg horse shows.
Some products require little capital, eg window cleaning.
Small firms receive grants and subsidies from the government. Market Structure Market structure refers to the number of firms in an industry. In perfect competition there are a large number of small firms in the industry, each producing identical products. Very few markets are perfectly competitive but one example is wheat. In a monopoly one firm supplies 25 per cent or more of a market.