CAIE A-Level Economics A2 7.6 Different Market Structures Questions
Practise classifying market structures, barriers and concentration using firm data, diagrams and real industry examples.
- Syllabus
- 2026–2028
- Course
- Economics 9708
- Level
- A2
Exam points
- compare market structures using sellers, barriers, product differentiation and price-setting power
- use diagrams to evaluate how entry barriers or contestability affect consumers and producers
- calculate or interpret concentration ratios from market-share tables
Covered syllabus points
Question 1
[Maximum number: 1]
Which statement is correct for a firm classed as a natural monopoly?
A
It will always operate in the public sector and earn normal profits.
B
It will have high barriers to entry and be the dominant producer.
C
It will easily benefit from external economies of scale.
D
It will have higher average costs than a monopolistically competitive firm.
B
Question 2
[Maximum number: 1]
Assuming the absence of price controls, in which industry is an individual firm least likely to be able to alter the price at which it sells its product?
A
air transportation
B
hairdressing
C
steel production
D
wheat farming
D
Question 3
[Maximum number: 1]
Which characteristic of an industry works towards reducing the barriers to entry for new firms?
A
significant advertising expenditure by existing firms
B
significant economies of scale
C
the absence of large costs associated with investment in capital assets
D
the possession by existing firms of legal rights to produce a product (e.g. patents)
C
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