Answer Expert Verified. Oligopoly is a market structure with a small number of firms which significant influence over an industry. The automobile industry is considered an oligopoly because it is dominated by a few key players. This means that it consists mainly of few major firms.Click to see full answer. Thereof, why is the automobile industry an oligopoly?The US automobile industry is a good example of an oligopoly. It consists mainly of three major firms, General Motors (GM), Ford, and Chrysler. The oligopoly in the American automobile industry is collusive, because of that, it will after that be pointed out how price cheaters are punished in that cartel.Beside above, why is competition limited in an oligopoly? The primary idea behind an oligopolistic market (an oligopoly) is that a few companies rule over many in a particular market or industry, offering similar goods and services. Because of a limited number of players in an oligopolistic market, competition is limited, allowing every firm to operate successfully. Likewise, people ask, what market structure is the automobile industry? Is the global Automobile Industry changing from an oligopoly to monopolistic competition? The current situation is the automobile industry is an oligopoly as there are few big firms and massive barriers to entry due to cost.Is Indian automobile industry a oligopoly?OLIGOPOLY • Oligopoly is a market structure in which the market or the industry is dominated by small number of sellers. Automobile Industries associated with India • Quite a few Domestic Indian Automotive companies: Tata Motors, Mahindra, ICML, Hindustan Motors, Premier Automobiles Ltd., San Motors etc.
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