A lower death rate is changing the size of China’s population, which in turn is altering demand for a range of products including table salt. The Chinese Government has recently thought about ending the state salt monopoly. However, an online survey showed that most Chinese people oppose bringing more competition into the market, believing that this would push up the price of salt.
(a)[2]
Define the term ‘monopoly’.
(b)[4]
Explain how a lower death rate may influence demand in a country.
(c)[6]
Analyse why the price may be lower in a monopoly market than under perfect competition.
(d)[8]
Discuss whether a rise in a country’s population size will lead to higher living standards.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Market with only one seller” …