rough draft - (c type of the product sold in the market(d barriers to new firms entering the market(e existence of nonprice competition in the market

Automobile Industry Introduction Automobiles are a liberating technology for people around the world. The personal automobile allows people to live, work and play in ways that were unimaginable a century ago. Automobiles provide access to markets, to doctors, to jobs. Nearly every car trip ends with either an economic transaction or some other benefit to our quality of life The automobile industry is also a major innovator, investing over €84 billion in research, development and production. The auto industry plays a key role in the technology level of other industries and of society. Vehicle manufacturing and use are also major contributors to government revenues around the world, contributing well over €400 billion. What determines a market structure . market structures describes a particular organization of a market in which certain key characteristics differ. The characteristics are: (a) number of firms in the market (b) control over the price of the relevant product

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Unformatted text preview: (c) type of the product sold in the market (d) barriers to new firms entering the market (e) existence of nonprice competition in the market. What is the market structure of automobile industry Oligopoly What is oligopoly? Oligopolies refer to a market structure where an industry is dominated by a small number of large firms An important characteristic of an oligopolistic market structure is the interdependence of firms in the industry. The interdependence, actual or perceived, arises from the small number of firms in the industry Oligopolistic competition can give rise to a wide range of different outcomes. In some situations, the firms may employ restrictive trade practices (collusion, market sharing etc.) to raise prices and restrict production. Where there is a formal agreement for such collusion, this is known as a cartel . Market structure of automobile industry...
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