A dominant producer gains economies of scale and charges lower prices than smaller rivals, but new firms find entry difficult. What is the central trade-off?
Lower average costs may benefit consumers, while high barriers can weaken future competition
Economies of scale guarantee wider consumer choice
Barriers to entry always reduce the dominant firm's market share
Low prices prove the market is competitive
28 exam-style questions on OCR GCSE Economics 2.5 Competition, covering 2.5.1 Why producers compete, 2.5.2 How competition affects price, 2.5.3 Economic impact of competition, and 2.5.4 Monopoly and oligopoly. Each one has a worked solution and a mark scheme showing where the marks go.