I have a Concord hi efficiency furnace (125 BTU). It is piped with 3-inch supply and 3-inch exhaust rather than the 2-1/2 inch as recommended in the installation manual. Will this affect the efficiency?

There may be a slight decrease in efficiency only because of the surface area exposed to the cold conditions. I would be more concerned about the proper back pressure in the exhaust system. If your venting system contains more than 2 90 degree elbows, you should be all right.