OCR Economics - 2.6 Production Revision

A village is over 10 miles away from the nearest two towns. The village shop sells bread. For someone living in the village wanting to buy bread, the shop is a

• competitor

• monopolist

• oligopolist

• specialist

A characteristic of a monopoly is that there is an absence of

• productivity

• opportunity cost

• economies of scale

• competition

A market is an oligopoly if

• there is only one firm in the market

• most of the market is supplied by a small number of firms

• each of the firms in the market makes many products

• each of the firms in the market has only a few customers

In a competitive market

• the government must control the price

• the item that is traded must be a good

• the item that is traded must be a service

• there must be many sellers

Which of the following is the most likely result of increased competition within a market?

• High barriers to entry

• High production costs

• Increased profit

• Lower prices

An oligopoly differs from a competitive market because

• firms in an oligopoly only compete on price

• firms in an oligopoly do not differentiate their products

• a competitive market has lower barriers to entry than an oligopoly

• a competitive market has larger firms than an oligopoly

The prices of branded goods, such as Heinz baked beans, are usually higher than a supermarket’s own label. This is likely to be due to

• lower profit margins

• lower average costs

• higher productivity

• higher advertising costs

Firms need to survive in a market. Which of the following is an example of a suitable method to survive?

• Enter into competition with consumers

• Provide an external economy of scale

• Reduce total supply

• Encourage existing customers to return