A phone manufacturer spends heavily on a more reliable battery to stand out from rivals. Which assessment best reflects this decision in a competitive market?
Innovation guarantees permanent market power regardless of rival responses
Innovation may attract consumers, but its cost could reduce profit if sales do not rise enough
Product improvement must reduce consumer choice and raise production costs forever
Rivalry means consumers cannot benefit from improvements in quality
149 exam-style questions on AQA GCSE Economics 1.5 Competitive and concentrated markets, covering 1.5.1a The range of market structures, 1.5.1b Distinguishing between market structures, 1.5.2a Characteristics of a competitive market, 1.5.2b How producers operate in competitive markets, 1.5.2c The economic impact of competition, 1.5.3a Characteristics of a non-competitive market, 1.5.3b How producers operate in non-competitive markets, 1.5.3c Monopoly and oligopoly, 1.5.4a The labour market and wage determination, and 1.5.4b Gross and net pay. Each one has a worked solution and a mark scheme showing where the marks go.