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With a small number of firms and few large sellers, competition
becomes aggressive in this industry as manufacturers compete by reacting
to each other?s price and quantity changes. Each automobile
manufacturer is selling similar, branded autos, but the industry still struggles
to predict the reaction their rival firms (Miller, 620)...
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Each automobile
manufacturer is selling similar, branded autos, but the industry still struggles
to predict the reaction their rival firms (Miller, 620). Barriers to
entry, including government regulations, pricing, customer loyalty and
research and development, have allowed this industry to become overly
competitive; legal barriers, patents and control over supplies are all
factors that present barriers to entry in the auto industry...
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