... to deter other companies from entering and gaining market share. An important barrier at the moment is the Selective and Exclusive Distribution network, (SED). Without the manufacturers right a dealer cannot sell the manufacturers cars in their showroom. 3. Firms must be interdependent. This is evident within any oligopolistic market but especially the UK car industry. Most firms set there price lists in line with suppliers, and focus their effect on non-price competition. It wouldn't benefit a supplier within the UK Car industry to lower their pricings, as being interdependent it would affect rivals and inevitably force them to cut pricing or risk losing market share. An imperfect demand curve is defined as Fig 1, which is where the demand curve is inelastic; and the quantity demanded is not very responsive to changes in price. This is due to the monopoly the Manufacturers have over their dealers. Some other factors that might ...

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