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The aluminum and steel industry in a foreign country is dominated by just three firms and these firms control at least 80 percent of the domestic market. The market structure in this country is a(n)

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Samawati

Answer:

Oligopoly market structure

Explanation:

Oligopoly is a market structure with few firms dominating a particular market or industry. The few firms control a huge percentage of the market share. Other small firms may operate in the market, although they command a small percentage of the market share.  Firms in the oligopoly market structure may sell similar or differentiated products.  Other characteristics of an oligopoly market are,

  • Firms are engaged in extensive advertising to attract customers.
  • There exist barriers to entry due to the high cost joining and economies of scale enjoyed by the few firms.
  • Each firm sets its price
  • Firms engage in business collaborations to ensure market dominance and profit maximization.

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