Edexcel A Level Economics B
Edexcel A Level Economics B 4.1 Competition and Market Power Exam Questions
Free Edexcel A Level Economics B exam questions on 4.1 Competition and Market Power, with mark schemes. Covers market structures, concentration, barriers to entry and pricing strategies.
4.1 Competition and Market Power exam questions
1 question pack of real past exam questions with its mark scheme. Answer every question without notes, then mark your answers line by line against the mark scheme.
StemUp mark scheme flashcards
A Level Economics Flashcards
Every answer is written in mark scheme wording, so you learn exactly what examiners give marks for. Pick your exam board, then test yourself with the questions on this page.
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About Edexcel A Level Economics B 4.1 Competition and Market Power
4.1 analyses how competitive markets are and why some firms gain market power. Questions often ask about barriers to entry and oligopoly behaviour.
What you need to know
- Market structures Perfect competition, monopolistic competition, oligopoly and monopoly, with their characteristics.
- Concentration ratios The combined market share of the largest firms, for example a four-firm ratio.
- Barriers to entry Economies of scale, sunk costs, brand loyalty, patents and control of resources.
- Oligopoly behaviour Interdependence, collusion, price wars, non-price competition and game theory.
Common mistakes in 4.1 Competition and Market Power
- Saying concentration ratios show profit.
- Assuming oligopolies always collude.
- Listing barriers to entry without explaining how they protect profits.
Try three 4.1 Competition and Market Power exam-style questions
1. Calculate the three-firm concentration ratio if the top firms have 30%, 25% and 15% market share. (1 mark)
Show the mark scheme answer
30 + 25 + 15 = 70 percent.
2. Explain one barrier to entry in the supermarket industry. (2 marks)
Show the mark scheme answer
Existing supermarkets have large economies of scale (1), so new entrants face higher average costs and cannot match their prices (1).
3. Explain why firms in an oligopoly might collude. (2 marks)
Show the mark scheme answer
Colluding lets firms act like a monopoly (1), restricting output and raising prices to increase joint profits (1).
4.1 Competition and Market Power FAQs
What does Edexcel A Level Economics B 4.1 cover?
Market structures, concentration, barriers to entry and the behaviour of firms with market power.
Which paper is Theme 4 examined in?
Paper 2, with Theme 2, and the synoptic Paper 3.
Is collusion legal?
Explicit collusion such as price fixing is illegal in the UK and EU and is investigated by the CMA.
Revise this topic with flashcards: A Level Economics Flashcards, with mark scheme answers for Anki and Quizlet.
