A business considering entering the pet-grooming market can rent premises on a short lease and resell most of its equipment if the venture fails.
How is this likely to affect the pet-grooming market?
A short lease may make the grooming services more differentiated
Reselling equipment may allow one business to set the market price
Recoverable equipment may reduce entry, making the market more concentrated
Lower possible losses may encourage entry, increasing the number of producers in the market
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.