Fur Trade Canada

In this essay, I am going to analyse the similarities and differences in structure and economic performance of the fur trade economy and a modern oligopoly. I am going to focus on the fur trade and the airlines industry in Canada. As we all know, fur trade is definitely one of the remarkable historical events in Canada. Fur trade was began around 16th century. The fur trade was mainly exporting the animal skins to Europe, for example: beaver, bear, and lynx. Airline industry is a system of transportation, which able to carry people and cargos by flying. The Canada airline industry started in 1987 and there were two airline companies in Canada. I am going to explain the similarities and differences by divided into two main parts: the structure

There are also some similarities between these two industries. They both have high and steady demand, and entry barriers. Fur trade was mainly ship the goods to Europe, as the fur could produce into hats, pelts, which increase the demand in Europe. Also, North West Company and Hudson’s Bay Company were operating for the fur trade, they set a high entry cost to prevent others to entre the market. For the Canada airline industry, there is a steady demand for passages to fly around the country. According to Madore, Shaw and Economic Division (1993) , one of the major entry barrier in Canada airline industry is having a frequent flyer programs which is mainly attract the loyalty customers. As there is an entry barrier, it is difficult for new firms to enter the market. Therefore, the fur trade and airline industry share the high and steady demand with a high entry

First of all, it increases the amount of trade. Most of the international trade requires airline to ship the cargos. When the trade increase, it is eventually attract more businesses and investment in Canada that leads to an economic growth. Secondly, the aircrafts can carry not only passages but also cargos. As international trade is important, the amount of air cargos has a significant increase. Canadian Airports Council (2013) listed that “ for airlines, it accounts for about 12% of industry revenues” (p17.). It showed that there is a positive relationship between the flights and the trade. If the supply for flights is getting higher, the demand for trade will increase as well. It is definitely increases the economic performance in Canada. One of the categories of GDP is net export, which is equal to exports minus imports. When the trade increases, it increases the exports of Canada that leads to a growth in Canada GDP. Since the technologies of aircrafts are getting advanced, the travel time is getting shorter. It encourages people travel more often, which increases the amount air passages. Canadian Airports Council (2013) stated “ a total of 7.5 million visitors to Canada spend almost $7.5 billion in Canada in 2012, the large majority (72%) by overseas visitors” (p.28). The data is demonstrated that the increase the growth of airline industry leads to the growth