Skip to content
MathsGenie logo
Quick links
Open app

Course home

  1. A Level
  2. Economics Edexcel A
  3. Question bank

3.4.3 Monopolistic competition

EasyMedium
12345
Question 3

Extract A

The high street growth of independent nail salons (INS)

The UK’s independent nail salons (INS) have experienced rapid expansion, offering highly price-competitive services. However, this growth has raised questions about regulatory compliance and labor standards.

Estimates of the number of independent nail salons operating in the UK vary widely, ranging from 8,000 to 15,000. This lack of centralized registry and data makes monitoring and taxation highly challenging for authorities. Historically, beauty treatments were high-end services found only in department stores or luxury spas. Today, they are accessible on almost every local high street. As retail habits shifted online and traditional retail stores shut down, vacant commercial spaces became abundant, driving commercial rents down significantly. Entrepreneurs seized on these low-cost storefronts to establish nail bars, which require minimal initial capital investment.

Startup costs are low—requiring only basic ventilation, manicure tables, nail polishes, and UV lamps. The labor market has also supplied a steady stream of workers, including recent migrants who find nail salons an accessible first step into employment. Many view it as a short-term role while settling in, though others remain trapped long-term under difficult conditions.

In many towns, salons compete intensely on price, with basic express manicures priced as low as £15. Simple math indicates the financial pressure: if a technician takes 40 minutes per client, they can serve a maximum of 12 clients in an 8-hour shift, generating £180 in revenue. Once the cost of materials, utility bills, business rates, and high street rents are deducted, paying the National Minimum Wage to workers becomes extremely difficult for salon owners unless they maintain near-continuous customer capacity.

Furthermore, research into the sector highlights poor health and safety conditions in some lower-end salons. Workers spent long hours inhaling acrylic dust and solvent fumes (such as acetone and ethyl methacrylate) without adequate local exhaust ventilation or personal protective equipment, such as face masks or gloves.


Using the information provided in Extract A, explain the market structure that best describes the independent nail salon (INS) industry in the UK.

[5]

3.4.3 Monopolistic competition Questions

  1. A Level
  2. /Economics
  3. /3.4.3 Monopolistic competition