A regional government is reviewing the market structure of its domestic drone-delivery sector, currently dominated by a single technology firm. Which of the following developments is most likely to increase the contestability of this market?
A technological shift where drone maintenance requires highly specialized, firm-specific diagnostics tools with zero resale value.
The introduction of long-term, exclusive service contracts between the incumbent firm and major online retailers.
An industry-wide agreement that allows new entrants to lease standardized battery-charging infrastructure on a pay-as-you-go basis.
An increase in the statutory minimum liability insurance premium that all drone operators must pay upfront annually.
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.