Three large firms supply online appointment-booking software to small businesses.
Table 1 shows each firm’s monthly price and market share before and after Firm P reduced its price.
| Firm | Price before Firm P’s price cut | Market share before Firm P’s price cut | Price one week after Firm P’s price cut | Market share one week after Firm P’s price cut | Price six weeks after Firm P’s price cut | Market share six weeks after Firm P’s price cut |
|---|---|---|---|---|---|---|
| P | £24 | 36% | £20 | 44% | £20 | 37% |
| Q | £23 | 34% | £23 | 29% | £20 | 33% |
| R | £25 | 30% | £25 | 27% | £20 | 30% |
Using the data in Table 1, explain why Firm P is likely to consider the reactions of Firms Q and R before making another change to its monthly 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.