9708/43/O/N/23 

Evaluate the view that monopolistically competitive firms will always charge lower prices and operate more efficiently than a monopoly firm. [20] 

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The model of perfect competition is the ideal form of market structure because it is the most efficient. 

With the help of diagrams, evaluate this statement. [20] 

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A government allows the merger of two large firms in the same industry.

With the help of a diagram, evaluate the view that this merger should not have been allowed. [20]

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Some firms in oligopoly markets choose to collude rather than engage in price competition. This will lead to higher prices and a less efficient allocation of resources.

• Evaluate this statement. [20]

9708/43/O/N/22 

• High market concentration ratios are closely linked to oligopoly market structures. Explain what this means and consider its importance in relation to the pricing policy of an oligopoly firm. [12] 

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• Monopoly firms will always aim to maximise profits and limit pricing is the only way to ensure that these profits are maintained in the long run. Discuss the extent to which you agree with this statement. [12] 

• Explain what economists mean by collusion and consider the view that collusion will occur only in a certain type of market structure. [13] 

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• Explain the relationship between marginal revenue and average revenue and their role in determining the output and profit of a profit maximising firm in a perfectly competitive market. [12] 

9708/41/M/J/22 

• Discuss the extent to which monopoly producers and the consumers of their products might benefit from the existence of barriers to entry. [13] 

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• Firms in perfect competition and firms in monopolistic competition will only achieve normal profits in the long run. This means that firms in both these types of market structure are equally efficient. Discuss, with the help of diagrams, the extent to which you agree with this statement. [12] 

• Interdependence is a key characteristic of oligopoly firms. This creates a problem regarding the pricing decisions made by such firms. Explain this statement and discuss the extent to which game theory can help to solve this problem. [13] 

9708/42/F/M/21 

• ‘A firm in a perfectly competitive market can make either a supernormal profit or a loss in the short run but will only make normal profit in the long run.’ Assess whether this statement is true. [12] 

• Discuss the view that a firm operating in a perfectly competitive market will achieve economic efficiency but a monopoly firm will not. [13]