Market P has 35 small firms renting similar portable sound equipment. New firms can start renting this equipment without major expense. Market Q has three large firms selling distinct satellite-imaging services, and setting up to compete requires substantial investment.
Which conclusion about the two markets is most accurate?
Firms in Market P have more freedom over their prices because there are many sellers
New firms find Market Q easier to enter because it has fewer firms to compete against
Firms in both markets have similar freedom over their prices because each has several sellers
Firms in Market P have less freedom over their prices than firms in Market Q
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.