Boeing, Northrup Grumman, and Lockheed Martin control the vast majority of the U.S. defense contractor industry. In terms of the form of competition, this industry is an example of
A)an oligopoly.
B)a trilateral monopoly.
C)a monopoly.
D)a pure competition.
E)a monopolistic competition.

Question

Quizplus · Accepted Answer

An oligopoly is a market structure in which a few large firms dominate the industry, and this is the case with the U.S. defense contractor industry. The presence of few large firms creates a situation where they are interdependent, and their decisions affect each other's profitability. They can control prices to some extent, and also invest heavily in research and development to remain competitive. Hence, an oligopoly is the best choice for this industry.

Boeing, Northrup Grumman, and Lockheed Martin Control the Vast Majority