Boeing and Airbus are the main civil aircraft manufacturers. The technology and other fixed costs required for other players to enter the market are very high. Thus, Boeing is a:

Question

BlackTom AI · Accepted Answer

The question describes a market dominated by a very small number of large firms (Boeing and Airbus) with high fixed costs and significant barriers to entry for new players. This setup is a classic depiction of an oligopolistic market structure.

Option analysis:

- Option: oligopolist.
  Rationale: In an oligopoly, the market is controlled by a few large firms, and entry barriers (such as high technology and fixed costs) prevent easy market entry for others. The aerospace industry is the textbook example, where Boeing and Airbus largely determine competitive dynamics, prices, and capacity constraints. This aligns with the given description of high fixed costs and costly entry barriers leading to a market with only a few dominant players.

Note on potential alternative choices (not present here):
- If the question had included options like 'monopolistic competition' or 'perfect competition,' those would be incorrect because they imply numerous small firms or differentiated products with low entry barriers, neither of which fits the Boeing–Airbus context.
- If it had suggested 'monopoly,' that would imply a single firm dominating the market, which is not the case here since there are two major players, not one.

In summary, given the two-firm concentration and substantial entry barriers, identifying Boeing as an oligopolist is consistent with economic theory on market structure in high-technology, capital-intensive industries.

ECON3200001.1251 Midterm Exam II

Boeing and Airbus are the main civil aircraft manufacturers. The technology and other fixed costs required for other players to enter the market are very high. Thus, Boeing is a:

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