Final answer:
The discussion addresses how new information and communications technologies influence firm size, considering the advantages that technology brings to small firms and the tendency towards market domination by large firms due to economies of scale and resource advantages.
Step-by-step explanation:
The question has initiated a highly relevant and complex discussion on the impact of ew information and communications technologies on the size and competitive landscape of firms. It explores whether these technologies favor the emergence and growth of small firms due to their ability to reach out beyond local markets or whether they aid larger firms in dominating the market, given their scale, resources, and infrastructure.
The argument for small firms suggests that technology facilitates a wider reach and customer base without significant capital investment, hinting at a landscape with more small competitors. On the contrary, we see examples like Microsoft and Amazon that dominate their respective markets, which supports the idea of technology enabling 'winner-take-all' scenarios.
The enterprise's choice of production technology, considering the cost of machines and labor, reflects the strategic action companies must undertake. This consideration can mean a shift from capital-intensive to labor-intensive production methods as relative costs change. However, factors such as economies of scale will ultimately impact which and how many firms can survive and thrive in a given market. Larger firms might produce at a lower cost due to these economies, outcompeting smaller firms, as seen in the example of plants labeled L or V outperforming smaller sizes like S or M.