COST-MINIMIZING NUMBER OF FIRMS AND DETERMINATION OF INDUSTRY STRUCTURE.

This articles investigates the determination of the market structure of an industry, whether it will operate under pure competition, oligopoly or monopoly in the U.S. The authors emphasized the multiproduct industry. In some industries the minimum point may occur at a very high level of output, well outside the range relevant for current or prospective demands. The analysis of the article begins by determining for any given industry output vector whether the cost-minimizing number of firms would make it a "natural monoploy" a 'natural oligoploy' or 'naturally competitive." Among the results emerging from the analysis is the conclusion that an abundant industry demand will tend to increase the degree of competition that is "natural" for the industry.