This paper provides a structure-performance theory that can accommodate leading firm efficiency as well as several competing market power hypotheses. We derive testable implications distinguishing the simple collusion, product differentiation, and scale economy hypotheses from the innovative leading firm alternative. It is shown that recent evidence of a positive market share-price-cost margin (PCM) relationship and a non-positive concentration-PCM relationship can reject the scale economy and simple collusion hypotheses in homogeneous product markets. Unfortunately, this same evidence cannot reject the product differentiation hypothesis in favor of leading firm efficiency.