A market for refillable food containers is earning unusually high profits. New firms can now rent the necessary moulding equipment cheaply instead of buying it. Which sequence of events is most likely to follow?
Few firms enter, market supply is unchanged and unusually high profits are protected
Few firms enter, existing firms rent equipment too and unusually high profits rise further
More firms enter, market demand increases and unusually high profits rise further
More firms enter, market supply increases and unusually high profits are reduced
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.