Different market structures
7.6What the syllabus asks of you
- perfect competition and imperfect competition: monopoly, monopolistic competition, oligopoly, natural monopoly
- structure of the listed markets as explained by number of buyers and sellers, product differentiation, degree of freedom of entry and availability of information
- barriers to entry and exit: legal barriers
- barriers to entry and exit: market barriers
- barriers to entry and exit: cost barriers
- barriers to entry and exit: physical barriers
- performance of firms in different market structures: revenues and revenue curves
- performance of firms in different market structures: output in the short run and the long run
- performance of firms in different market structures: profits in the short run and the long run
- performance of firms in different market structures: shutdown price in the short run and the long run
- performance of firms in different market structures: derivation of a firm’s supply curve in a perfectly competitive market
- performance of firms in different market structures: efficiency and X-inefficiency in the short run and the long run
- performance of firms in different market structures: contestable markets: features and implications
- performance of firms in different market structures: price competition and non-price competition
- performance of firms in different market structures: collusion and the Prisoner’s Dilemma in oligopolistic markets, including a two-player pay-off matrix
- definition and calculation of the concentration ratio
Drill this topic
Every question on Different market structures, untimed, marked as you go.
Make a worksheet
Choose the years and how many questions, then print it with the answers on separate pages.
71 questions
1May / June 2026 · Paper 31 · Q2Show mark scheme →
Aabnormal profits in the long run
Ball firms charge the same price
Cbarriers to entry are high
Dproduct differentiation
Mark scheme
2May / June 2026 · Paper 32 · Q6Show mark scheme →
A$5000
B$10 000
C$15 000
D$40 000
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3May / June 2026 · Paper 33 · Q2Show mark scheme →
Aabnormal profits in the long run
Ball firms charge the same price
Cbarriers to entry are high
Dproduct differentiation
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4May / June 2026 · Paper 34 · Q1Show mark scheme →
Aoligopoly
Bmonopolistic competition
Cmonopoly
Dperfect competition
Mark scheme
5Oct / Nov 2025 · Paper 33 · Q5Show mark scheme →
Atotal revenue decreases to OGLQ; deadweight welfare loss decreases by KLN
Btotal revenue decreases to OGLQ; deadweight welfare loss increases by KLN
Ctotal revenue increases to OHKQ; deadweight welfare loss decreases by KLN
Dtotal revenue increases to OHKQ; deadweight welfare loss increases by KLN
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6Oct / Nov 2025 · Paper 34 · Q1Show mark scheme →
Aan ability to detect price cuts by rivals
Bthe abolition of anti-trust measures
Cthe existence of a small number of firms in the industry
Dunstable demand conditions for products
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7May / June 2025 · Paper 31 · Q6Show mark scheme →
AA
BB
CC
DD
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8May / June 2025 · Paper 32 · Q6Show mark scheme →
Abarriers to entry
Bcollusion
Clack of competition
Dsuccessful advertising
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9May / June 2025 · Paper 33 · Q6Show mark scheme →
AA
BB
CC
DD
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10May / June 2025 · Paper 34 · Q6Show mark scheme →
AIndustry X is highly contestable.
BIndustry X is oligopolistic.
CIndustry Z has a lower level of output than industry X.
DIndustry Z is less competitive than industry X.
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11Oct / Nov 2024 · Paper 31 · Q8Show mark scheme →
Ano barriers to entry
Bidentical products
Cprice takers
Dsmall number of buyers and sellers
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12Oct / Nov 2024 · Paper 32 · Q5Show mark scheme →
AMarket concentration increased.
BSales of the top four firms fell.
CScotsdale and Welshpool's profits rose.
DThe concentration ratio of the four largest firms fell.
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13Oct / Nov 2024 · Paper 32 · Q9Show mark scheme →
Amonopoly profit maximisation
Bprincipal agent problem
Cprisoner's dilemma
Dsatisficing
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14Oct / Nov 2024 · Paper 33 · Q5Show mark scheme →
ADiagram A
BDiagram B
CDiagram C
DDiagram D
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15Oct / Nov 2024 · Paper 33 · Q6Show mark scheme →
AFirms cannot recover all fixed costs if they cease operations.
BFirms in the industry all operate at the equilibrium level of output.
CLarge firms do not have to increase capital to grow.
DMultinational companies always benefit from economies of scale.
Mark scheme
16Oct / Nov 2024 · Paper 33 · Q10Show mark scheme →
AThe largest four firms’ market share totals 25%.
BThe largest four firms have a market share of 25% each.
CThere are only four firms in the industry.
DThe largest firm has a 25% market share.
Mark scheme
17May / June 2024 · Paper 31 · Q5Show mark scheme →
AA price is fixed for the product that never changes throughout its life cycle.
BFirms will agree on the level of advertising costs for a new product.
CIf one firm raises its price, other firms will maintain their original price to increase their market share.
DIf one firm lowers its price, other firms will increase their price.
Mark scheme
18May / June 2024 · Paper 31 · Q7Show mark scheme →
AThe market is supplied by a large number of firms.
BFirms are free to enter and leave the market.
CFirms cannot earn abnormal profits in the short run.
DFirms produce differentiated goods.
Mark scheme
19May / June 2024 · Paper 31 · Q10Show mark scheme →
AIt will always operate in the public sector and earn normal profits.
BIt will have high barriers to entry and be the dominant producer.
CIt will easily benefit from external economies of scale.
DIt will have higher average costs than a monopolistically competitive firm.
Mark scheme
20May / June 2024 · Paper 32 · Q5Show mark scheme →
Aair transportation
Bhairdressing
Csteel production
Dwheat farming
Mark scheme
21May / June 2024 · Paper 32 · Q9Show mark scheme →
Aa contestable market
Ba monopoly
Cmonopolistic competition
Dperfect competition
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22May / June 2024 · Paper 33 · Q5Show mark scheme →
AA price is fixed for the product that never changes throughout its life cycle.
BFirms will agree on the level of advertising costs for a new product.
CIf one firm raises its price, other firms will maintain their original price to increase their market share.
DIf one firm lowers its price, other firms will increase their price.
Mark scheme
23May / June 2024 · Paper 33 · Q7Show mark scheme →
AThe market is supplied by a large number of firms.
BFirms are free to enter and leave the market.
CFirms cannot earn abnormal profits in the short run.
DFirms produce differentiated goods.
Mark scheme
24May / June 2024 · Paper 33 · Q10Show mark scheme →
AIt will always operate in the public sector and earn normal profits.
BIt will have high barriers to entry and be the dominant producer.
CIt will easily benefit from external economies of scale.
DIt will have higher average costs than a monopolistically competitive firm.
Mark scheme
25Feb / March 2024 · Paper 32 · Q7Show mark scheme →
Aoligopoly
Bmonopolistic competition
Cmonopoly
Dperfectly competitive
Mark scheme
26Feb / March 2024 · Paper 32 · Q10Show mark scheme →
Acontestable market
Bkinked demand curve
Cprincipal agent problem
Dprisoner’s dilemma
Mark scheme
27Oct / Nov 2023 · Paper 31 · Q3Show mark scheme →
Aperfect competition: no; monopolistic competition: no; pure monopoly: yes
Bperfect competition: no; monopolistic competition: yes; pure monopoly: yes
Cperfect competition: yes; monopolistic competition: no; pure monopoly: no
Dperfect competition: yes; monopolistic competition: yes; pure monopoly: no
Mark scheme
28Oct / Nov 2023 · Paper 31 · Q5Show mark scheme →
Acopying both a price rise and a price fall
Bcopying a price rise and ignoring a price fall
Cignoring a price rise and copying a price fall
Dignoring both a price rise and a price fall
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29Oct / Nov 2023 · Paper 31 · Q7Show mark scheme →
Ahigh fixed costs, high output minimum efficient scale, high level of sunk costs
Bhigh fixed costs, low output minimum efficient scale, high level of sunk costs
Clow fixed costs, high output minimum efficient scale, low level of sunk costs
Dlow fixed costs, low output minimum efficient scale, low level of sunk costs
Mark scheme
30Oct / Nov 2023 · Paper 32 · Q4Show mark scheme →
AThe market has become monopolistically competitive.
BThe market has changed from an oligopoly to a monopoly.
CThe market has changed from perfect competition to an oligopoly.
DThe market remains an oligopoly.
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31Oct / Nov 2023 · Paper 32 · Q5Show mark scheme →
AIt is allocatively efficient.
BIt is making abnormal losses.
CIt is making abnormal profits.
DIt is making normal profits.
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32May / June 2023 · Paper 31 · Q6Show mark scheme →
AX and W
BX and Y
CW and Z
DY and Z
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33May / June 2023 · Paper 32 · Q9Show mark scheme →
Ano / no / no
Bno / no / yes
Cno / yes / yes
Dyes / no / yes
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34May / June 2023 · Paper 32 · Q10Show mark scheme →
Acost barriers
Blegal barriers
Cmarket barriers
Dphysical barriers
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35May / June 2023 · Paper 33 · Q6Show mark scheme →
AX and W
BX and Y
CW and Z
DY and Z
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36Feb / March 2023 · Paper 32 · Q6Show mark scheme →
Ano allocative efficiency, no supernormal profit
Bno allocative efficiency, yes supernormal profit
Cyes allocative efficiency, no supernormal profit
Dyes allocative efficiency, yes supernormal profit
Mark scheme
37Oct / Nov 2022 · Paper 31 · Q7Show mark scheme →
Amonopoly
Bmonopolistic competition
Coligopoly
Dperfect competition
Mark scheme
38Oct / Nov 2022 · Paper 31 · Q8Show mark scheme →
Aconsumer resistance
Bdecreasing returns to scale
Cdifferentiated products
Dfreedom of entry and exit
Mark scheme
39Oct / Nov 2022 · Paper 32 · Q9Show mark scheme →
AIHGK
BJMLK
CIHGLMJ
DIHFEMJ
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40Oct / Nov 2022 · Paper 32 · Q12Show mark scheme →
Aa monopolistic firm in short-run equilibrium
Ba monopoly making supernormal profits
Can oligopoly engaged in a price war
Da non-profit maximising state monopoly
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41Oct / Nov 2022 · Paper 33 · Q7Show mark scheme →
Aperfect competition, because they all link their interest rates to that of the central bank
Bperfect competition, because they offer identical products and services
Cmonopolistic competition, because a competitive market prevents them making excess profits
Doligopoly, because they are affected by the actions of other banks
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42Oct / Nov 2022 · Paper 33 · Q12Show mark scheme →
AIt has stock it wants to sell.
BIt is concerned about new entrants.
CIt wants to benefit from greater economies of scale.
DIt wants to maximise profits.
Mark scheme
43May / June 2022 · Paper 31 · Q7Show mark scheme →
AFirms have similar cost structures.
BProducts of the firms are close substitutes.
CThere are high barriers to entry into the market.
DThere is a large number of competing firms.
Mark scheme
44May / June 2022 · Paper 31 · Q9Show mark scheme →
AThe individual firm's demand curve is more elastic.
BThe individual firm's demand curve has moved left.
CThe profit-maximising price is greater than average cost.
DThe profit-maximising price is greater than marginal cost.
Mark scheme
45May / June 2022 · Paper 31 · Q11Show mark scheme →
A1–2 units
B3–4 units
C5–6 units
D7–8 units
Mark scheme
46May / June 2022 · Paper 32 · Q7Show mark scheme →
Amonopoly
Bmonopolistic competition
Coligopoly
Dperfect competition
Mark scheme
47May / June 2022 · Paper 32 · Q11Show mark scheme →
Ano | yes | yes
Byes | no | yes
Cyes | yes | no
Dyes | yes | yes
Mark scheme
48May / June 2022 · Paper 32 · Q12Show mark scheme →
APGKL
BPHJL
CPHJL minus PGNM
DPGKL minus LKNM
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49May / June 2022 · Paper 33 · Q7Show mark scheme →
AFirms have similar cost structures.
BProducts of the firms are close substitutes.
CThere are high barriers to entry into the market.
DThere is a large number of competing firms.
Mark scheme
50May / June 2022 · Paper 33 · Q9Show mark scheme →
AThe individual firm's demand curve is more elastic.
BThe individual firm's demand curve has moved left.
CThe profit-maximising price is greater than average cost.
DThe profit-maximising price is greater than marginal cost.
Mark scheme
51May / June 2022 · Paper 33 · Q11Show mark scheme →
A1–2 units
B3–4 units
C5–6 units
D7–8 units
Mark scheme
52Feb / March 2022 · Paper 32 · Q7Show mark scheme →
Amonopolistic
Bmonopoly
Cmonopsony
Dperfect competition
Mark scheme
53Feb / March 2022 · Paper 32 · Q9Show mark scheme →
AThe short-run profit position will encourage other firms to enter the market and the firm's demand curve will shift to the left.
BThe short-run profit position will encourage other firms to enter the market and the firm's demand curve will shift to the right.
CThe short-run profit position will encourage other firms to exit the market and the firm's demand curve will shift to the left.
DThe short-run profit position will encourage other firms to exit the market and the firm's demand curve will shift to the right.
Mark scheme
54Oct / Nov 2021 · Paper 31 · Q3Show mark scheme →
Aan increase in the availability of cheap loans to start new businesses
Ban increase in merger and takeover activity in the industries
Can increase in information about prices for consumers available on the internet
Da reduction in fixed costs in the deregulated industries
Mark scheme
55Oct / Nov 2021 · Paper 31 · Q7Show mark scheme →
Amonopoly
Bmonopolistic competition
Coligopoly
Dperfect competition
Mark scheme
56Oct / Nov 2021 · Paper 31 · Q11Show mark scheme →
AMR curve shifts to right, AR curve shifts to right, MC curve shifts up, AC curve unchanged
BMR curve shifts to right, AR curve shifts to right, MC curve unchanged, AC curve shifts up
CMR curve unchanged, AR curve unchanged, MC curve shifts up, AC curve unchanged
DMR curve unchanged, AR curve unchanged, MC curve unchanged, AC curve shifts up
Mark scheme
57Oct / Nov 2021 · Paper 32 · Q7Show mark scheme →
Aaverage revenue = average costs
Baverage revenue = marginal revenue
Caverage costs = marginal costs
Daverage costs = marginal revenue
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58Oct / Nov 2021 · Paper 33 · Q10Show mark scheme →
Aperfect competition
Bmonopolistic competition
Coligopoly
Dmonopoly
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59Oct / Nov 2021 · Paper 33 · Q11Show mark scheme →
ADemand is relatively elastic, meaning the firm would see a reduction in total revenue.
BDemand is relatively elastic, meaning the firm would see an increase in total revenue.
CDemand is relatively inelastic, meaning the firm would see a reduction in total revenue.
DDemand is relatively inelastic, meaning the firm would see an increase in total revenue.
Mark scheme
60Oct / Nov 2021 · Paper 33 · Q12Show mark scheme →
AA
BB
CC
DD
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61May / June 2021 · Paper 31 · Q6Show mark scheme →
AOligopolists are unable to achieve profit maximisation.
BSatisficing is the best objective for firms that operate under conditions of oligopoly.
CThere are always benefits available for oligopolists if they reduce price, but not if they increase it.
DThere is a tendency towards price stability when firms operate under conditions of oligopoly.
Mark scheme
62May / June 2021 · Paper 31 · Q9Show mark scheme →
AJM
BJK
CJM × OQ
DJK × OQ
Mark scheme
63May / June 2021 · Paper 31 · Q11Show mark scheme →
Arevenue-output graph: horizontal line
Brevenue-output graph: curve rising then falling
Crevenue-output graph: straight line through origin
Drevenue-output graph: curve rising with increasing slope
Mark scheme
64May / June 2021 · Paper 32 · Q9Show mark scheme →
AThe firm does not account for any external benefits.
BThe firm has no incentive to cut its costs of production.
CThe firm’s price is set higher than its average costs.
DThe firm’s price is set higher than its marginal costs.
Mark scheme
65May / June 2021 · Paper 32 · Q10Show mark scheme →
AThe firm will experience diseconomies of scale.
BThe firm will make a loss.
CThe firm will maximise profits.
DThe firm will maximise total revenue.
Mark scheme
66May / June 2021 · Paper 32 · Q11Show mark scheme →
Amonopolistic competition
Bmonopoly
Coligopoly
Dperfect competition
Mark scheme
67May / June 2021 · Paper 32 · Q13Show mark scheme →
Aallow private firms to merge to create a monopoly
Bappoint a regulatory body to guarantee supplies at all times
Cderegulate nationalised industries to create a free market
Denable customers to switch easily from one private firm to another
Mark scheme
68May / June 2021 · Paper 33 · Q6Show mark scheme →
AOligopolists are unable to achieve profit maximisation.
BSatisficing is the best objective for firms that operate under conditions of oligopoly.
CThere are always benefits available for oligopolists if they reduce price, but not if they increase it.
DThere is a tendency towards price stability when firms operate under conditions of oligopoly.
Mark scheme
69May / June 2021 · Paper 33 · Q9Show mark scheme →
AJM
BJK
CJM × OQ
DJK × OQ
Mark scheme
70May / June 2021 · Paper 33 · Q11Show mark scheme →
Arevenue-output graph: horizontal line
Brevenue-output graph: curve rising then falling
Crevenue-output graph: straight line through origin
Drevenue-output graph: curve rising with increasing slope
Mark scheme
71Feb / March 2021 · Paper 32 · Q9Show mark scheme →
AW
BW + X
CW + X – Z
DX
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