CAIE IGCSE Economics 3.7.2 Monopoly markets
Practise explaining monopoly features and judging how one dominant firm affects prices, output, choice, profit and consumers.
- Syllabus
- 2027–2029
- Course
- Economics 0455
Exam points
- predict how a shift from competition to monopoly affects output, prices and long-run profit
- discuss whether economies of scale from one firm can benefit consumers despite less choice
3.7.2—Monopoly markets question 1
In 2022, Paraguay's production possibility curve (PPC) shifted to the right. Paraguay has a mixed economic system. Its government provides merit goods and public goods. The country's private sector is a major producer of shampoo. The firms in the shampoo industry make use of division of labour. There are several firms in the industry, but the number is declining. There is a possibility that soon there may be just one firm in the industry.
Discuss whether or not consumers would benefit from only one firm producing shampoo.
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