Tuk-tuks, which are three-wheeled motorised rickshaws, are used in several countries. India is the biggest producer of this vehicle. India’s largest tuk-tuk manufacturer competes with domestic firms and with imported tuk-tuks. The industry is becoming more capital-intensive and more competitive, although it is still not close to perfect competition.
(a)[2]
Define ‘capital-intensive’ in production.
(b)[4]
Explain two features that characterise perfect competition.
(c)[6]
Analyse two internal diseconomies of scale that may affect a large firm.
(d)[8]
Discuss whether consumers would gain from a rise in imports.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Employs a large share of capital” …