Answer to Question #20517 in Microeconomics for amera

Question

In the following article , I want you to comment on the type of market structure and whether Kinked Demand apply and what will possibly be the market share for GM and VW? ""In case you didn't know, Volkswagen is hell-bent on becoming the largest automaker in the world. The German carmaker has inched closer to that goal, having outsold General Motors in China last quarter for the first time in eight years. Volkswagen's sales in China, its largest marker, increased by 21 percent last quarter to 704,991 units. Those numbers almost tripled GM's third-quarter growth, and were enough to beat out the American automaker's 664,765 sales. GM, however, still leads in year-to-date sales in China by a slim margin of around 77,000 units. The Asian nation also happens to be GM's largest market, and according to the report in Automotive News, China's car market may grow to be larger than the US, Japan and Germany combined in three years' time. About the news his company was bested in China by VW last quarter, GM CEO Dan Akerson is quoted saying, "It's not whether you're the biggest car manufacturer. It's whether you want to be the most profitable." It should be noted of these figures that GM includes truck figures, yet excludes Hong Kong and Macau from its Chinese sales numbers, while VW does just the opposite. Through September of this year, Volkswagen had 5 of the 10 best selling vehicles in China. GM boasted three of the cars on that list. One car not on China's Top 10 list is the Malibu. Though GM's second-best selling car in the US, it has been called a "disaster" by Lin Huaibin of IHS Global Insight. The roughly 29,000 units sold were apparently unable to hang with VW's Skoda competitor. The Automotive News report cites anti-Japanese sentiments and older GM product as reasons for Volkswagen's third quarter rally. Other brands with increased sales included Hyundai, Kia and Ford, citing that the jump in sales for these brands helped their parent companies counter losses incurred in the beleaguered European car market."