CIE IGCSE Topical Past Paper 2
3.8 Market structure
0455/23/M/J/23
The number of Chinese restaurants in the UK fell by approximately 7% in 2020 compared to the year before. Reasons for this include falling demand for Chinese food and increasing competition from other types of food. Some small firms selling Chinese food are also unwilling to invest in the latest technology because of the possible opportunity costs.
d) Discuss whether or not competition is harmful to a firm. [8]
0455/23/O/N/22
Washington State is the state which grows the most apples in the US. In 2019, apple production increased in Washington State but the market was in disequilibrium. Apple farming is a labour intensive industry because apples are picked by hand. The market for apples in the US is competitive.
d) Discuss whether or not consumers benefit from a competitive market. [8]
0455/22/F/M/22
The economic problem means that countries have to decide what to produce. Ghana uses much of its agricultural land to grow cocoa. Cocoa is sold to chocolate producers. The world’s main chocolate producer in 2019 was a US firm with a 14% share of the global market. That firm was the largest seller of chocolate in the US and, if it merges, may become a monopoly.
d) Discuss whether or not consumers would benefit from a firm becoming a monopoly. [8]
0455/22/F/M/21
Sweden has a mixed economic system. In 2018, it was operating at a point inside its production possibility curve (PPC). In 2018, the country’s schools employed nearly 2500 extra teachers. A few of these had previously been actors. A higher number had previously been government officials involved with regulation of Swedish monopolies.
d) Discuss whether all monopolies have low costs of production. [8]
0455/23/O/N/20
Russia’s birth rate fell by 11% in 2017 to its lowest level for a decade. Over the next 30 years, Russia’s population is forecast to fall from 144 million to 107 million. The government announced measures to reverse this decline in population. In 2017, it also announced privatisation plans and measures to reverse a decrease in investment which could lead to a fall in the quantity of capital goods. Privatisation can reduce monopoly power in a market.
d) Discuss whether or not a government should allow monopolies. [8]
0455/22/F/M/19
The mobile (cell) phone industry is growing in Asia with more workers being employed. In March 2017, there was a merger between two mobile phone producers, both of which had relatively high fixed costs. This merger created one of the largest mobile phone firms and moved the Asian market further from perfect competition and closer to monopoly. It was expected that profits in the industry would increase as a result of the merger.
b) Explain two ways monopoly differs from perfect competition. [4]
0455/23/M/J/18
The production process in the oil industry is capital-intensive. The pollution it generates means it is one cause of environmental market failure. A Nigerian oil monopoly is starting to produce more environmentally friendly liquefied petroleum gas (LPG), rather than kerosene, in an attempt to reduce pollution. The Nigerian government intends to split the monopoly firm into separate companies to improve efficiency.
d) Discuss whether or not removing a firm’s monopoly power will benefit consumers. [8]
0455/22/M/J/18
In the UK, bus journeys outside London have fallen by nearly 40% since 1980. This fall in demand has been largely due to a rise in bus fares, a rise in income and changes in the price and quality of substitutes. On some routes there are monopolies operating and this lack of competition can push up the price.
b) Explain two advantages a firm may gain from being a monopoly. [4]
0455/22/F/M/18
South Africa has more than 700 state-owned enterprises, a number of which have engaged in vertical integration and horizontal integration. Some of the state-owned enterprises are monopolies, including a railway monopoly. A leading South African economist has argued that more of the country’s resources should be devoted to building and operating new railway lines and stations.
a) Define state-owned enterprise. [2]
c) Analyse how a monopoly could benefit consumers. [6]