Market Structure (Cambridge (CIE) IGCSE Economics)

Exam Questions

1 hour29 questions
11 mark

In some industries, a monopoly controls output and prices.

What is the most likely impact of this on consumers?

  • higher prices

  • higher profits

  • higher taxes

  • more choice

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21 mark

Which combination of characteristics correctly describes a monopoly?

 

barriers to entry

economies of scale

A

B

C

D

high

high

low

low

possible impossible possible impossible

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    31 mark

    Which combination is usually found in a monopoly?

    • many buyers and many sellers

    • many buyers and single seller

    • single buyer and many sellers

    • single buyer and single seller

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    41 mark

    Which characteristic can exist both in monopoly and in a competitive market?

    • freedom of entry

    • many buyers

    • many sellers

    • perfectly elastic demand curve

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    1 mark

    What is a key advantage of competitive markets for consumers?

    • Limited product variety and choices

    • Higher prices due to lack of competition

    • Lower prices and increased product variety

    • Reduced quality of goods and services

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    11 mark

    What is found in a competitive market?

    • Every firm earns large profits.

    • Firms with limited capital can enter the market.

    • The costs of production are always lower than in a monopoly.

    • There is limited choice for consumers.

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    21 mark

    Why might a government encourage a monopoly?

    • It can compete against foreign firms.

    • It can have high average costs.

    • It can make excessive profits.

    • It can prevent innovation.

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    31 mark

    What is characteristic of a monopoly market structure?

    • A monopolist may determine the price of its product.

    • A monopolist’s product has many substitutes.

    • There are no external costs.

    • There is easy entry into the market.

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    41 mark

    Which international market is the most competitive?

    • diamonds

    • foreign currency

    • petrol (fuel)

    • washing machines

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    1 mark

    How do firms in competitive markets influence prices?

    • They can set prices at any level they prefer

    • They accept the market price as given

    • They collaborate to fix prices

    • They set prices based on production costs

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    11 mark

    The table shows characteristics of a market.

    What are the characteristics of a competitive market?

     

    product

    number of buyers

    number of sellers

    role of firm

    A

    B

    C

    D

    identical

    identical

    similar

    unique

    many

    one

    many

    few

    many

    many

    many

    few

    price taker

    price maker

    price taker

    price maker

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      1 mark

      What impact might an increase in the number of competitors have on a competitive market?

      • It could lead to higher prices for consumers

      • It might decrease demand for the product

      • It could enhance consumer choice and reduce prices

      • It might lead to lower product quality

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      1 mark

      The table shows characteristics of a market.

      What are the characteristics of a monopoly market?

       

      Minimum market share

      Barriers to entry

      Number of sellers

      Role of firm

      A

      B

      C

      D

      50%

      25%

      13%

      25%

      low

      high

      low

      high

      many

      single

      many

      single

      price taker

      price maker

      price taker

      price taker

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        1 mark

        What impact might a lack of competition have on innovation in a monopoly market?

        • It encourages firms to invest heavily in research and development

        • It leads to rapid innovation due to rivalry among competitors

        • It often leads to slower innovation and complacency

        • It results in constant product upgrades and improvements

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        1 mark

        What benefit might a monopoly market offer in terms of economies of scale?

        • Limited opportunities for cost reduction

        • Reduced efficiency in production due to  the large scale

        • Higher production costs and prices for consumers

        • Cost reduction and better efficiency in production

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