(a)[2]
Identify two fixed costs.
(b)[4]
Explain two differences between monopoly and perfect competition.
(c)[6]
Analyse what factors determine a firm’s demand for labour.
(d)[8]
Discuss whether a merger will increase profits or not.
Economics 0455 · IGCSE · Market structure
Market structure — practice question
The mobile (cell) phone industry in Asia is expanding and employing more workers. In March 2017, two mobile phone producers merged, and both firms had relatively high fixed costs. The merger produced one of the largest mobile phone firms and pushed the Asian market further away from perfect competition and nearer to monopoly. It was anticipated that industry profits would rise because of the merger.