Final answer:
The structure of firms is influenced by production and cost conditions, as well as market structure, which involves industry competitiveness and the degree of market power held by each firm.
Step-by-step explanation:
Three main factors that affect the structure of all firms are the production and cost conditions that a firm faces, and the market structure for the products in question. The production and cost conditions involve the combinations of labor, materials, machinery, or what we call inputs or factors of production. Market structure, on the other hand, is a multidimensional concept that examines how competitive an industry is and includes considerations such as the amount of market power each firm possesses. These factors together influence a firm's behavior and decision-making process in the industry.