(a)[2]
Using the information, explain the market structure present in aircraft manufacturing.
(b)[4]
Explain why the two companies might be worried about the possible entry of China into the aircraft manufacturing industry.
(c)[6]
'The aircraft manufacturing industry is characterised by substantial fixed costs.'
- Using an example from the information, explain what is meant by fixed costs. [2]
- With the help of a diagram, explain how an increase in an aircraft manufacturer’s output affects its average fixed costs. [4]
(d)[8]
Discuss whether economic theory can explain how two companies will compete when they dominate a market.