Answer to Question #312233 in Economics of Enterprise for Nompumelelo

Question

Justify the type of market structure that uber operate in and evaluate the likehood of uber making an economics profit in the long-run

Answer 1

 Uber is an oligopoly market structure because we have only a few firms dominating the market. The Uber companies are few, and they advertise their products a characteristic of an oligopoly market. For one to join the uber business, there are barriers to market entry. Similarly, the company is interdepended because the uber charges are affected by the taxi and public vehicle prices. Uber may not make economic profits in the long run because it has been investing heavily in the project but only realizing considerable losses to the extent of laying off employees.