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I The UK car market does not represent either monopoly or a competitive situation. There are several competing manufacturers who through a complex dealership agreement control not only the product available but the price and package which dealers can offer to the customer. Within categories of car in terms of size specification and servicing arrangements the manufacturers arrive at prices which are similar to each other's. Any competition which exists is not in terms of price but more to do with trade-in deals, temporary discounts and other special offers which might include cheap finance, insurance and service. Taking all these characteristics together we can describe in terms of economic theory this market as monopolistic. Monopolistic competition is theory developed by Edward Chamberlin. His theory of imperfect competition in simple terms states that each firm has a monopoly of it's product but other firms have similar but not identical products. The definition...

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