Fill This Form To Receive Instant Help
Homework answers / question archive / Why is the additives industry an oligopoly?
Why is the additives industry an oligopoly?
Additives manufacturing as the word suggests is the transformative process of producing objects or systems that are stronger and lighter e.g. creation of exhaust pipes from aluminum alloys. These industries are oligopoly in nature because in manufacturing requires large economies of scale and high fixed costs. On the other hand, these industries consist of few sellers and many buyers where the sellers have control over the price of their products. Additionally, these firms may encounter entry barriers such as licensing, large capital requirements and other government policies. Lastly, these firms may differ in size depending on their work and scope in the market e.g. aerospace companies may be bigger.