Car industry oligopoly

Show why this statement is true. On the other hand if the firm lowers its prices the competitors will also lower their prices to protect their market share and so the firm that has taken the initiative to reduce the price will only gain slightly by way of quantity sold.

Car industry oligopoly

Oligopoly and the Automobile Industry in the USA Introduction There is no industry more present in the world-wide community than the automobile industry.

The automobile has changed the lives, culture, and economy of the people and nations that manufacture and demand them. There are more than million passenger cars alone on the roads today. This drastic change has occurred by the booming economies in such nations as Japan, Germany, Canada, France, Italy, and other nations.

Germany produces 9 percent, Spain, France, South Korea, and Canada each produce 5 percent of the international market in In the US alone, the auto industry, which includes itscar-related businesses, create 12 million jobs. The US has three main auto manufacturers; Japan has five major producers as does Germany.

Each company produces a new line of cars for each model annually.

Car industry oligopoly

There are many different types of cars, like sedans, station wagons, Sport Utility Vehicles SUVtwo-doors, and four-doors, but by comparing models between two competing companies, you can see how great the similarities are.

Rose, 23 The auto industry can still thrive even though its products are so similar because the demand for cars is immense and continuous. People rely on cars for so many things that life without one seems impossible, especially in the US which registered million cars inwhereas Japan, the second highest, only registered 30 million.

The creation and production of a new car starts about three to four years before it is released to the public. Yates, GM, Ford, and Chrysler, who embodied industrial excellence and manufactured much of the equipment that defeated Japan and Germany more than sixty years ago, are reduced to begging the federal government to prevent their bankruptcy.You can see below why the auto industry is an oligopoly.

Few firms dominate, they frequently interact and their “behavior” can be mutually dependent. Few firms dominate, they frequently interact and their “behavior” can be mutually dependent. Iran’s automotive market is in the grip of “oligopoly” as the current regulations have significantly impeded competition, said Reza Shiva, the head of .

The current situation is the automobile industry is an oligopoly as there are few big firms and massive barriers to entry due to cost. However, The industry seems like it is changing to a monopolist competition structure as new firms join the industry .

An oligopoly consists of a select few companies having significant influence over an industry. Industries like oil & gas, airline, mass media, auto, and telecom are all examples of oligopolies.

The auto industry is another example of an oligopoly, with the leading auto manufacturers in the United States being Ford (F), GMC, and Chrysler. In , the men who had just pulled off the biggest and most successful industrial mobilization in the history of the world began to construct the biggest and most profitable oligopoly the world.

Oligopoly in the auto industry