In order to investigate the relationship between structure andperformance, measures or metrics of structure and performance arerequired.Measures of performance most often consider measures of marketpower examining price, cost, and profit and may include:
Rate of return
[(market value of firm)/(replacement cost of assets)]
I.Rate-of-ReturnLong-run (economic) profits will be positive under the “bad”structures of monopoly and oligopoly. Profits will also be positive forfirms achieving a competitive advantage.Need to adjust accounting profit and then compare to somebenchmark to determine level of profit.