within a perfectly competitive marketplace, there are many small firms supplying similar products in the same territory and no single one has any power over price because each firm operates independently without regard for its competitors.perfect competition
a key factor that must be considered when
what type of competition is the car industry?
i’m not well versed in this industry, but the auto industry seems to be a combination of competitive rivalry between manufacturers and cooperative competition regarding safety equipment.
there are many different types of competitions that affect the car industry including regulatory challenges that pose as barriers to entry into new markets, brand prestige battles for marketplace differentiation, technological innovations seen as market advantage, branding wars over customer base segmentation strategies, intensive domestic rivalry within global demand dominance battles.
the point of this statement is that competition can exist at all levels and vary in its role from one area to the next. for example prestige and consumer need for innovation correlate with more intense competition than safety equipment attitudes like “everybody tries their best.”
is automobile market perfectly competitive?
competition in the automobile industry is limited. there are three major automakers (detroit big three) that leave little room for innovation within the market where others must compete on price exclusively, which locks producers into selling goods with high unit costs. with these factors, barriers to entry are high and it's difficult for new firms to enter the market.
the automobile companies (known as detroit big three), which is composed of general motors (gm), ford motor company, and chrysler group llc respectively despite having varied prices and quality of automobiles produced ranging from luxury cars to hybrid-fueled vehicles, all fall under monopolistic competition theory due to their limited competition with one another; therefore leaving any international company entry restrictions. the only possible
what kind of market structure is the automobile industry?
the automobile industry has a perfect mix of both monopolies and oligopolies, giving it features of both the competitive market structure and that of a monopsony.
i'm hesitant to say that the automobile industry is anywhere near having even just one side win out considering all factors, but suffice it to say there are definite benefits for being on either side. for example, an advantage of being on the monopoly side is less competition in pricing or marketing strategies – this can lead to greater efficiency since you won't have as many distractions. on the other hand, if you're on the competitive end then you will have more freedom to respond faster to changing demands for products thanks to your ability not only improve processes internally but also work with suppliers
why the automobile industry is an oligopoly?
rule of thumb: most industries are oligopolies. there's no “right” number, but the degree of concentration is usually evaluated in terms of market share stands. to answer your question specifically, it seems there were around 60 car manufacturers who participated in the us market for about 10% of that car market by volume during its heyday.
the automobile industry is known as an oligopoly for a few reasons. it is due to the key set requirements and characteristics needed in order to start up a successful business in this industry which restricts its membership to limited and small amount of companies only.
lastly, each company in this line has very huge research and development investments with heavy expenditure on personnel manpower required for steady