economics project

Industry Analysis (Country-USA) (Industry - Automotive) Please do not write an introduction to the industry analysis and do not explain how the industry affects the GDP and employment of the country (unless this is linked to trade barriers). Your analysis should focus on microeconomics theories studied in lectures. 5 topics The analysis here will be industry specific. This section could include some of the following: You must describe the industry structure in that country. Number of firms in the industry and their market share (market power) Can they affect the market price? Are they large enough? Type of a product (identical product v differentiated) Are there barriers to entry to market? What are they? How would you describe the market structure? If it is a monopoly, what are the sources of monopoly? If it is oligopoly, Is there a potential for collusion in the market? If it is oligopoly, analyse if it is easy to collude? Analyse how this affects the price and output levels and the economic welfare. How prices are set? Are there price floors or price ceilings? How would that affect the industry? (if applicable) What affect the demand for this particular product? (Price, price of complement and substitute goods, income, taste, fashion, legal, advertising etc) Has there been changes in any of this factors? Explain what re the changes (must be referenced) Holding everything else constant how do you think this would affect the demand of this good? For example, changes in income level. You need to research GDP of the country, what has happened to income level throughout time (increase/decrease), if we assume that this is the only factor how do you think increase/decrease in income would affect the demand for this product. Show on a diagram if applicable What affect the supply for this product? (price, price of complement and substitute goods, technology, barriers to enter, change in the cost of factors of production-land labour, capital-, government subsidies etc) You need to analyse this changes and how they affect the market (see above) Availability of substitutes and complement goods, What are the substitutes and complement goods? How would that affect the elasticity How responsive consumers are to changes in price? Comparison of elasticity with the overall market (for example elasticity of steel and elasticity of metals) What are the factors affect PED and PES. Link to your industry CED- how does change in price/demand for substitutes or complement would affect the demand for your industry. For example, a decrease in price of air travel may affect the demand for hotels/ tourist attractions/ aircraft. YED: changes in income level and responsiveness of consumer: Normal goods v Inferior goods. Cost: what are the fixed cost and variable costs (not how much, what are they?) is there a need for economies of scale? Trade Are there trade barriers to protect the industry? If so, what are they and what are the arguments for that? Has there been a trade barrier in the past? What was the argument and why they were reduced/eliminated? Conclusion: Conclusion for the industry report. REFERENCES : All points have to be referenced. Please list your references at the bottom of the page.