Microeconomics: Market Structures | OCR A-Level Economics (H460)
Microeconomics: Market Structures
- 113 questions
- 10 subtopics
- Component 01: Microeconomics
- Component 01 and Component 03
Market Structures is examined on component 01 of OCR Economics, Microeconomics.
113 recall questions across 10 subtopics.
Sample questions from Microeconomics: Market Structures
Answer each one closed book first, then open the answer.
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Perfect competition in the short and long run and allocative efficiency
For a price taker, how are price, average revenue and marginal revenue related?
Show the answer
They are all equal, so the single horizontal line is at once the demand, average revenue and marginal revenue curve. -
Productive efficiency and perfect competition as a benchmark
Which efficiency condition does perfect competition meet in both runs, and which only in the long run?
Show the answer
Allocative efficiency is met in both the short and the long run, while productive efficiency is met only in the long run. -
Monopoly characteristics, equilibrium and static efficiency
What is on each axis of the monopoly diagram, and which curves appear on it?
Show the answer
Quantity is on the horizontal axis and price and cost on the vertical; the diagram shows a downward-sloping average revenue curve, a marginal revenue curve below it falling twice as steeply, and the firm's marginal cost and average cost curves. -
Dynamic efficiency, price discrimination and natural monopoly
Define price discrimination and state the three conditions it requires.
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Price discrimination is charging different prices to different consumers for the same product for reasons unrelated to cost; it requires monopoly power over price, the ability to separate consumers by their price elasticity of demand, and the prevention of resale between them. -
Characteristics of monopolistic competition and its short run equilibrium
What distinguishes monopolistic competition from oligopoly?
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There are many firms and no interdependence, since each is too small for its decisions to provoke a reaction, and barriers to entry are low rather than high. -
Long run equilibrium and efficiency in monopolistic competition
Why can the long run tangency point never be at the minimum of average cost?
Show the answer
Because the average revenue curve slopes downwards, it can only be tangent to the falling section of the average cost curve, so the tangency must lie to the left of the minimum. -
Characteristics of oligopoly, concentration ratios and the kinked demand curve
The five largest firms in a market hold 28%, 22%, 14%, 9% and 7%, with the remainder shared among small producers. Calculate the four-firm concentration ratio.
Show the answer
Adding the four largest shares gives 28 + 22 + 14 + 9 = 73, so the four-firm concentration ratio is 73%. -
Non-price competition, collusion and the pros and cons of oligopoly
Define collusion.
Show the answer
Collusion is an agreement between firms to limit competition, typically by fixing prices, restricting output or dividing the market between them.
The 10 subtopics
One subtopic is one session. Work down the list.
| Subtopic | What it covers | Questions |
|---|---|---|
| Perfect competition in the short and long run and allocative efficiency | Recall questions on the characteristics of perfect competition, price-taking firms, short and long run equilibrium, supernormal profit and losses, and allocative efficiency. | 16 |
| Productive efficiency and perfect competition as a benchmark | Recall questions on productive efficiency in perfect competition, the firm's short run supply curve, weak dynamic efficiency, and perfect competition as a benchmark model. | 8 |
| Monopoly characteristics, equilibrium and static efficiency | Recall questions on the characteristics of monopoly, barriers to entry, the monopoly diagram and supernormal profit, and why a monopolist is allocatively and productively inefficient. | 12 |
| Dynamic efficiency, price discrimination and natural monopoly | Recall questions on dynamic efficiency and X-inefficiency, price discrimination and its effect on consumers, natural monopoly, and the advantages and disadvantages of monopoly. | 14 |
| Characteristics of monopolistic competition and its short run equilibrium | Recall questions on the characteristics of monopolistic competition, how it differs from perfect competition and oligopoly, and the firm's short run profit and loss diagram. | 9 |
| Long run equilibrium and efficiency in monopolistic competition | Recall questions on long run tangency equilibrium in monopolistic competition, excess capacity, efficiency, advertising, and the advantages and disadvantages of this market structure. | 11 |
| Characteristics of oligopoly, concentration ratios and the kinked demand curve | Recall questions on the characteristics of oligopoly, interdependence, calculating and interpreting concentration ratios, and the kinked demand curve model with its criticisms. | 12 |
| Non-price competition, collusion and the pros and cons of oligopoly | Recall questions on non-price competition and product differentiation, overt and tacit collusion, cartels, price leadership, price wars, and the advantages and disadvantages of oligopoly. | 12 |
| Characteristics of contestable markets, sunk costs and hit-and-run entry | Recall questions on contestable markets, sunk costs, hit-and-run entry, limit pricing, how the threat of entry changes incumbent behaviour, and long run profit. | 8 |
| Efficiency, barriers and the limits of contestable markets | Recall questions on how contestability promotes productive and allocative efficiency, barriers that reduce contestability, predatory versus limit pricing, and the limitations of contestability theory. | 11 |
How the guide is worked
Answering a question from memory stores it far better than reading the answer again. The guide runs that as a fixed procedure on one subtopic at a time, about twenty minutes a session.
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Step 1 · Closed book
Cover the answers. Work through one subtopic and write down what you can. Leave blanks where you have nothing.
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Step 2 · Open book
Go back to the top. Read each printed answer and write it out in full, including the ones you had right.
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Step 3 · Closed book again
Same questions, same order, from memory. The gap between pass one and pass three is the session result.
Read the full method, the return schedule and the research behind it.
Nearby topics
OCR A-Level Economics Active Recall Guide
Every topic, not just this one. 1,226 questions with their answers.