Which of the following is an aspect of an industry's market structure?

• A. The production technology used by consumers
• B. The physical location of the industry
• C. The level of government taxation
• D. The number of firms in the industry

Answer: (D)

Verified step by step guidance

1. Understand that an industry's market structure refers to the characteristics that define the competitive environment in which firms operate.
2. Identify key aspects of market structure, which typically include the number of firms in the industry, the type of products they sell (homogeneous or differentiated), the ease of entry and exit, and the level of competition.
3. Recognize that factors like the production technology used by consumers, the physical location of the industry, and government taxation are external or contextual factors but do not define the market structure itself.
4. Focus on the number of firms in the industry as a fundamental aspect because it directly affects competition, market power, and pricing strategies within the market.
5. Conclude that among the options given, the number of firms in the industry best represents an aspect of the market structure.