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Edexcel IGCSE Economics 1.2.6.c regulation of competition

Edexcel IGCSE Economics 1.2.6.c regulation of competition
Edexcel IGCSE Economics syllabusEconomics 4EC1First assessment 2019

Practise competition-regulation questions by explaining blocked mergers or easier market entry using monopoly power and consumer choice.

How this is tested

  • Explain why a competition regulator may block a merger using market share context.
  • Link easier market entry to more firms, lower prices or improved consumer choice.

Question 1(h)

[Maximum number: 3]

When a firm increased its prices, many consumers stopped buying its products.

In April 2023, the Competition and Markets Authority (CMA), the competition regulator in the UK, prevented the purchase of Activision by Microsoft. Microsoft already controlled about 60-70% of the market for online video gaming.

Explain one reason why the CMA may have made this decision.