| Sumario: | But even with the annoying discontinuities that arise when there is an optimal firm or plant size, the important general result still holds: When there are at least two non-colluding firms in an industry, there is no clear-cut relationship between the number of firms and the degree of competition. The absence of perfect competition must arise from violation of one or more of the conditions C1-C6--that is, it must arise from such things as indivisibilities, factor immobility, nonmaximizing behavior by factors, monopolistic access by individual firms to production techniques, and lack of information concerning the returns earned by given factors in different uses.
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