1MICROECONOMICS Table of Contents Introduction................................................................................................................................2 Relevance to microeconomics....................................................................................................2 Conclusion..................................................................................................................................3 Reference....................................................................................................................................4
2MICROECONOMICS Introduction Microeconomics is a branch of economics that deals with behaviours of individual economic agents and single market in economics. The paper evaluates a news article based on Nissan’s new electric car using relevant theories of microeconomics. Relevance to microeconomics Market is an important branch of economics. The term market in economics defines a relation between sellers and buyers. The two parties involve in exchanger of good using money as a medium of exchange (Fine, 2016). Markets are of several types. The number of sellers and buyers determine the extent of competition and marketing strategy of sellers. The various types of markets are perfectly competitive market, monopoly market, oligopoly market and monopolistic competition. The Automobile industry generally has an oligopolistic structure. Oligopoly is a market characterized by few sellers and large number of buyers. The few large players in the market capture a major share in the market. Japan is considered as one of top three car producing countries. Nissan, Honda, Toyota, Subaru, Daihatsu, Mazda and Lexus are some of the dominating car brand in the industry (japanindustrynews.com, 2016). In view of growing pollution globally, countries attempt to reduce the use of fossils fuels as much as possible. The petrol and diesel run vehicles generates significant pollution. To counter the pollution externality countries increasingly make use of electric vehicles (Rader, 2014). Japan’s famous car company Nissan has launched a new concept of electric car which is more powerful that its GT-R sports car (bloomberg.com, 2017). In the oligopoly market extensive competition prevails among the few sellers. In the Automobile industry as the competition speed up leading car companies are trying to enhance their performance to
3MICROECONOMICS grab a greater share of customers. The companies are now investing their money and time to provide a better longevity. In response to Nissan’s step the other two big companies Honda and Toyota has launched battery powered models. The car companies in Japan are trying to facilitate their competitive exposure by introducing customer oriented services. The new electric car gives Nissan an opportunity to compete in the championship of Formula E racing starts from 2018. Conclusion In the oligopolistic market structure of Japan’s automobile industry the major car companies are competing with each other by improving their manufactured car. Nissan, Honda, Toyota, Renault Mitsubishi all are involved in the competition and trying to attract more buyers.
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4MICROECONOMICS Reference Fine, B. (2016). Microeconomics.University of Chicago Press Economics Books. Ma, M., & Sano, M. (2017).Nissan Unveils an Electric Car More Powerful Than Its GT- R.Bloomberg.com.Retrieved4November2017,from https://www.bloomberg.com/news/articles/2017-10-25/nissan-unveils-electric-car- that-beats-sportscar-gt-r-in-power Neely, C. (2017).The Japanese Automotive Industry.Japan Industry News. Retrieved 4 November2017,fromhttps://www.japanindustrynews.com/2016/03/japanese- automotive-industry/ Rader, T. (2014).Theory of microeconomics. Academic Press.