Question

Airbus pioneered the development of the new superjumbo jet A380 at a cost of $15 billion. It quickly obtained contracts that are expected to be ordered in the next 20 years, thereby effectively shutting out its competitor, Boeing. Airbus benefits from

absolute advantages.

comparative advantages.

economies of scale.

factor endowments.

first-mover advantages.

Answer 1

Airbus benefits from first-mover advantage.

Step-by-step explanation:

First-mover advantage is the advantage of a pioneer firm gains by purchasing resources early or building technological leadership. The firm is then rewarded with monopoly-like status or very large profit margins.

In this case Aribus is the technological leader for developoing the superjumbo jet first. And it is rewarded with monopoly status because Boeing has been effectively shut out.