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Monopoly in Military Expenditures

The defense industry in the US is largely oligopolistic. However, even though there are very few major contractors, they employ numerous subcontractors. This examines how economic and defense spending fluctuations affect the industry on the whole.
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Citation Style TURABIAN
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Pages 7
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Monopoly In Military Expenditures

The defense industry is largely oligopolistic, with the federal government the sole customer, or "monopsonist" (McConnell, 1991). The industry consists of relatively few very large contractors and many small satellite subcontractors which cluster around them. The business of a contractor in defense work comprises research and development and/or production. The work can vary from exploratory studies, costing thousands of dollars, to extensive production programs involving billions and requiring broad subcontracting arrangements. In practice, the firm that does the research and development often contracts the production work as well.
As much as 75% of the annual dollar value of all prime

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