1.1 The car industry market structure and the characteristics of the market.

In the car industry it changes in terms of the trends and in the market condition. It is obvious that the market structure in the car industry is an oligopoly market because some large supplier is often the controlling ones. In the oligopoly market, the firms concentrated for the spending of advertising and marketing due to the high competition results in the market and firms manufacture branded products. Therefore, the car industry is an excellent illustration of an oligopoly market. Mehta (2010) states that 'what is an oligopoly market’.
There are three important characteristics of an oligopoly market. Firstly, in the car industry it is a common that it will be led by few huge firms. Secondly, an oligopoly market is divided into two categories which are the homogenous and differentiated products.   The homogenous or differentiated products are specific industries in an oligopoly market. While differentiated products is those like in monopolistic market. Lastly, the entry barriers that actually help existing firms to learn more about firms to market control. Mehta (2010) states that ‘What are the Characteristics of Oligopoly’.

1.2 Level of competition in the car industry , oligopoly markets structure and the reasons for the competition that has changed.
There are three models of oligopoly used to explain the price-output behavior. The kinked-demand model assumes a non-collusive oligopoly.

Each individual firm assured that the rivals will compete with any price cuts from other firms. Therefore, the views of each firm for their demand are inelastic when the price decreased and the total revenue falls while the demand is elastic when the price is decreased. In addition, when the price is increasing, there are reasons to believe that the competitor will follow accordingly because they may raise their market shares by not raising prices. Price-output behavior,...