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Firm Size and Competition

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Historically, product markets were dominated by large firms and service markets by small firms. This seems to have reversed itself somewhat in recent years. What factors might have been at work?

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The solution clearly explains the factors why the trend that product markets were dominated by large firms and service markets by small firms has reversed in recent times. The answer goes into considerable amount of detail in order to evaluate this trend and provide reasons for this reversal. The response begins with a clear evaluation of the existing trend and then goes back to the question being asked. Overall, an excellent response to the question below.

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Economics Midterm - Q.16
Historically, product markets were dominated by large firms and service markets by small firms. This seems to have reversed itself somewhat in recent years. What factors might have been at work?

Product markets were dominated by large firms
Because of changes in market conditions and infrastructure over the last 30 years have made the preferred structure in many product markets as smaller and flatter. The globalization of markets, facilitated by improvements in transportation, communications, and ...

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