Final answer:
Technological advancements have influenced how markets are defined by expanding market reach due to the rise of technology and globalization. This has increased competition and has sparked debate over whether it will lead to smaller or larger firm sizes in the future.
Step-by-step explanation:
Technological advances, particularly in information and communications technologies, have major implications on how markets are defined today. This change has been driven by two interconnected shifts: the rise of technology and the expansion of globalization. The proliferation of the internet and other communication technologies has not only expanded market boundaries, allowing consumers to purchase products from anywhere in the world, but it has also intensified the competition that local retail businesses face. This is evidenced in both consumer-focused and business-to-business markets.
There's a debate on whether these technological innovations will favor the emergence of more small businesses or lead to market domination by large firms. Improved technology can help small firms access wider markets, while the same technological advances may also enable large firms to manage operations more effectively on a global scale, potentially leading to a 'winner-take-all' scenario. This controversy surrounding firm size and technology's influence on market structure poses an interesting question for economists, businesspeople, and policymakers.