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1.5 Perfect competition, imperfectly competitive markets and monopoly

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Question 6

The following table shows the market shares of the five leading firms in a specific service market.

FirmMarket share (%)
Company Alpha25
Company Beta16
Company Gamma20
Company Delta12
Company Epsilon9
Others18

If Company Beta and Company Epsilon merge to form a single firm, what happens to the three-firm concentration ratio (CR3CR_3CR3​) and the five-firm concentration ratio (CR5CR_5CR5​)?

A

Falls / Falls

B

Falls / Rises

C

Rises / Falls

D

Rises / Rises

Markscheme

1.5 Perfect competition, imperfectly competitive markets and monopoly Questions

  1. A Level
  2. /Economics
  3. /1.5 Perfect competition, imperfectly competitive markets and monopoly

136 exam-style questions on AQA A Level Economics 1.5 Perfect competition, imperfectly competitive markets and monopoly, covering 1.5.1 Market structures, 1.5.2 The objectives of firms, 1.5.3 Perfect competition, 1.5.4 Monopolistic competition (A-level only), 1.5.5 Oligopoly (A-level only), 1.5.6 Monopoly and monopoly power, 1.5.7 Price discrimination (A-level only), 1.5.8 The dynamics of competition and competitive market processes, 1.5.9 Contestable and non-contestable markets (A-level only), 1.5.10 Market structure, static efficiency, dynamic efficiency and resource allocation (A-level only), and 1.5.11 Consumer and producer surplus (A-level only). Each one has a worked solution and a mark scheme showing where the marks go.

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