Table 1 shows current information about two regional markets for commercial kitchen equipment.
| Market | Total annual sales | Combined annual sales of the four largest producers | Product differentiation | Minimum start-up cost |
|---|---|---|---|---|
| P | £120 million | £54 million | Weak | £2 million |
| Q | £90 million | £63 million | Strong | £12 million |
New production equipment is expected to reduce the minimum start-up cost in Market Q to £1 million next year. Product differentiation in Market Q is expected to remain strong and no other barrier to entry is expected to change.
Calculate the difference between the combined market share of the four largest producers in Market Q and the combined market share of the four largest producers in Market P.
Using Table 1 and your answer to part (a), explain why Market Q is likely to become more competitive, but may remain less competitive than Market P.
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.