Eco 365 Week 4 Individual Assignment
The company that I have chosen for this assignment is the Boeing Corporation (NYSE: BA). This company primarily manufactures airplane for civil and military purposes as well. This company also makes satellites that are for civil and military purposes. This company is a manufacturing concern, and its market structure is that of a duopoly. The reason as to what I believe that this is a duopoly (A market structure where there are only two manufacturers).
The characteristics of oligopoly markets include high barriers to entry, a limited number of firms and pricing power. The barriers include size, product complexity, high initial costs, government regulations and limited distribution abilities. For example, it is difficult and expensive to build an airplane, or to get computer users to switch their applications and files over to a new operating system. When a limited number of firms operate in a market, these firms can raise prices to pass on raw materials and other cost increases to their consumers, thus maintaining or even increasing profit margins. (Basu, 2011)
After extensive research and analysis, it turns out that Bowing and Airbus are the two main competitors who compete for the civil and military aviation contracts. This status quo has been there since the cold war although the Russians have two aircraft manufacturers (Yakolev and MIG industries). These Russian companies are way too inefficient and substandard in their production techniques and the products they manufacture. Bowing has been going thro