Introduction to the Topic
Australia is one of only some nations with the capabilities to design cars from scratch and manufacture in considerable volumes. Car sales in Australia are also an important element with the Australian Automotive Industry along with the Australian Economy in total.
The Australian Auto Industry (A.A.I. in short) may be divided into two interrelated sectors, the Production ( Manufacturing) sector and the Car Sales (or Import-Sales) sector, both equally vital for the total efficiency with the A.A.I. On one hand, the Manufacturing sector refers towards the industry circumstances beneath which Australian Manufacturing companies compete, by generating vehicles and related items, using the key aim of maximizing income. However, the Sales sector refers to the market circumstances beneath which car representative sale companies compete, by the sale of cars and associated products, having the identical aim with organizations inside sector one certain.
1.1-Analyzing the Manufacturing Sector
There’s only a single market structure that can ideally describe the marketplace conditions within the Manufacturing sector if A.A.I., this is Oligopoly. As you will discover only two organizations that generate cars in Australia, and these are Ford and Holden, the competitor’s procedures and pricing tactics are based between these two organizations. The following economic model shall assistance define the competitors and economic conditions for the Australian Automotive Manufacturing market.
1.2- The Game-Theory Model for Oligopoly
The Game Theory model is used to clarify the pricing and competition policies of firms in an oligopolistic industry structure. Furthermore, it may show a …Read More