A local market for mobile bicycle repairs has many firms offering similar services, and new firms can enter easily. The table shows changes in the market over two years.
| Year | Number of firms | Average charge per repair | Average cost per repair |
|---|---|---|---|
| 1 | 10 | £30 | £18 |
| 2 | 15 | £27 | £18 |
Calculate the decrease in profit per repair between Year 1 and Year 2.
Explain how the change in the number of firms affected profit per repair, and predict what is likely to happen to profit per repair if more firms enter while average cost remains at £18.
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.