Do industries make firms or do firms make industries? A central debate in econom

Question

Do industries make firms or do firms make industries?

A central debate in economics, reflected and largely driven through debates between economists

at Harvard and ones at Chicago, was around the appropriate role of government in insuring

efficiency of industries. This took the form of debate over whether profits came from industry

factors that led to concentrated industries (the stuff of Harvard research) or whether apparent

industry differences in profits were driven by differences within firms that allowed some firms to

concentrate their industries.

please use citations and references to answer it. answer should be 75-100 words,

Explanation / Answer

It is generally believed that group of firms come together and make industries. When the firms work in a concentrated manner and manufacture same good, this leads to making of industries by the firm. There has been differences in profits of the industry which were driven by differences within firms that allowed some firms to concentrate their industries. Thus, differences in profits led to concentration of firms in the industry. Thus, it is the firms which make industries and not industries make firms.

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