Classify the automobile industry. a. perfect competition b. monopolistic competition c. oligopoly d. monopoly
Classify the automobile industry.
a. perfect competition
b. monopolistic competition
Do you know the answer?
cau-rasmaApril 8, 2023 в 07:27
The automobile industry can be classified as an oligopoly. An oligopoly is a market structure in which a few large firms dominate the industry, and each firm has a significant impact on the prices and output in the market. In the automobile industry, a handful of large firms such as Toyota, General Motors, Ford, and Volkswagen dominate the market, and the actions of these firms can significantly affect the prices and production levels of cars.
While there is some differentiation among brands and models, the competition is not perfect or purely monopolistic. The automobile industry does not meet the conditions for perfect competition since there are barriers to entry such as high fixed costs, economies of scale, and government regulations. Additionally, there is some product differentiation, but it is not significant enough to meet the criteria for monopolistic competition. Finally, a monopoly occurs when a single firm dominates the industry, which is not the case in the automobile industry.
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