Boeing vs. Airbus

Essay specific features

 

Issue:

Business

 

Written by:

Laurie M

 

Date added:

March 21, 2015

 

Level:

College

 

Grade:

B

 

No of pages / words:

1 / 199

 

Was viewed:

3284 times

 

Rating of current essay:

 
Essay content:

First, we find evidence of significant market segmentation between the medium- and long-range wide-body planes, consistent with the anecdotal evidence on the near monopoly position enjoyed by the Boeing 747 in the long-range market until the early 1990s. Second, despite the small number of firms in the industry, market competition has intensified (we estimate higher demand elasticities and lower markups over time), especially with the entry of new aircraft varieties...
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Third, the markup estimates implied by the Bertrand and Cournot competition are relatively similar. This might be explained by the growing presence of multi-product firms in the industry. As producers expand the range of products, their incentive to aggressively underbid their rivals is diminished, since price cuts might also hurt their own sales of other products...
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