In the market for ready-to-eat soups, three large producers supply 78% of sales. Their soups differ in recipes, pack sizes and packaging, while smaller producers supply the remaining 22%.
Which statement about the market for ready-to-eat soups is correct?
The market is competitive, because the differences between the soups give buyers many close substitutes.
The market cannot be concentrated, because smaller producers still supply 22% of soup sales.
The market is a monopoly, because three producers together supply 78% of all soup sales.
The market is concentrated, and the differences between the soups make buyers less likely to switch on price.
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.