Product Choice and Market Structure My product choice is automobile/Car and the company is Ford. Traditionally, the American auto industry has been an oligopolistic market. By the end of the 1920s it was dominated by three large companies: Ford, General Motors and Chrysler. This domination by three large companies remained even after the Second World War. These companies hold the largest share of the automotive market. The three main players in the American automotive market, namely Ford, General Motors and Chrysler, with the entry into the market of foreign companies such as Toyota and Nissan. The market continues to be almost the same as it was in the 60s and 70s. Since only a few large companies have dominated the automotive market, one can speak of an oligopolistic market structure. All firms in the industry are interrelated and dependent in terms of production or price setting. Every company has market power so it can influence market conditions such as supply and demand in the market. If a firm changes the price of its products or the level of production, it will take into account the reactions of other firms producing the similar product. This is because every company in this market has enough market power to influence the market conditions and therefore whenever a company decides any of its policies or actions; always consider the corresponding actions that will be taken by its rivals. If a company reduces the prices of its products, other companies will also react by reducing the prices of their products in order to maintain their market shares. Product differentiation happens in the automotive industry in one form or another. It could be in the form of weight, size, appearance, color, features, etc. This type of product differs...... middle of paper......y in research and development. The automotive industry requires continuous invention/exploration as the need for new features/technologies is constantly increasing. Furthermore, as concerns about global warming are on the rise, companies are spending a lot of money on research and development to make the car more fuel efficient and environmentally friendly. This creates further difficulties for new businesses to enter the automotive manufacturing sector as they may not have needed the technology to get started. References: Mankiw, G.N. (2006), Principles of Microeconomics, 4th edition, Cengage Learning. Snyder, C and Nicholson W ( 2008), Microeconomic Theory: Basic Principles and extensions, 10th edition, Cengage Learning. How the US automobile has changed, published April 2012, available at: http://www.investopedia.com/articles/pf/12/auto- Industry.asp#axzz20Z7qv7zh [accessed at: 30/10/2013]