I can tell you from experience that both agents and publishers will demand chapter breaks--more than you think are necessary. It is the trend in publishing to go for shorter and shorter chapters. I suppose it has to do with the ever dwindling attention span of the average reader, but I try not to think about that.
Wait, where was I?
Oh right, chapters. My own novel of some 100,000 words was originally broken into only 9 chapters. My publisher had a good laugh over that, sent it to editing, and it was returned to me chopped into 30. Three-oh.
As each of my chapters begins with a quotation, it meant I had to come up with 21 more interesting/engaging/philosophical quips. ie, more work for me. Being notoriously lazy, this did not sit well with me.
I'm afraid this trend is only going to continue. To that end, I have written my next novel so that no chapter is longer than 135 words, which my personal studies indicates takes about the same amount of time to read as it takes the average person to take the average pee. (more on my studies later).
I came to this decision after realizing that this is now the longest amount of time the modern reader is willing to concentrate on anything. Ah well, back to my Playstation.