Exam (elaborations)
AQA Market Structures A level Economics 2024 Exam Questions and Answers
- Course
- Institution
AQA Market Structures A level Economics 2024 Exam Questions and Answers
[Show more]
Seller
Follow
RevisionKing
Reviews received
Content preview
AQA Market Structures A levelEconomics 2024
Exam Questions and Answers
perfect competition - Answer>> a market structure in which a large
number of firms all produce the same product
Perfectly competitive market Characteristics - Answer>> 1. infinite
number of suppler and consumers
2. each firm is a price taker
3. consumers have perfect information
4. producers have perfect information
5. products are homogeneous
6. Firms are profit maximisers
7. no entry barriers
Allocative efficiency in perfect competition - Answer>> it is
allocatively efficien because firms produceswhere MC=MR, and
here P=MR, so P=MC
Supernormal profits are competed away (perfect competition) -
Answer>> Short term SNP attract new firms to the market - SNP
competed away - firms lower prices - normal profits
short run equilibrium perfectly competitive - Answer>>
long run equilibrium perfect competition - Answer>> other firms
enter the market - no entry barriers
- shift supply curve right
- market price falls until excess profits competed away
, A firm will leave market if unable to make profit in the long run
(Perfect competition) - Answer>> If market price falls below
average unit cost - firm making less than normal profit
- no barriers to exit - leave the market
Productive efficiency in perfect competition - Answer>> firms try to
maximise profits - try to produce where MR = MC - produce at the
bottom of average cost curve
X-inefficiency - Answer>> means that production costs could be
reduced at that level of production
x efficiency - Answer>> measures how successfully a firm keeps
costs down
X inefficiency can be caused by - Answer>> 1. using factors of
production in a wasteful way
2. paying too much for factors of production
No dynamic efficiency in perfect competition - Answer>> Lack of
SNP iii long run - no extra profit to be re invested into the
company for technology, research and development - dynamic
efficiency not achieved
static efficiency - Answer>> if allocative and productive efficiency
are achieved as any particular point in time
Ways Firms could compete (not price) - Answer>> improved
products
better quality service
wide product range
advertising and promotion
nicer packaging
products easy to use
The benefits of buying summaries with Stuvia:
Guaranteed quality through customer reviews
Stuvia customers have reviewed more than 700,000 summaries. This how you know that you are buying the best documents.
Quick and easy check-out
You can quickly pay through credit card or Stuvia-credit for the summaries. There is no membership needed.
Focus on what matters
Your fellow students write the study notes themselves, which is why the documents are always reliable and up-to-date. This ensures you quickly get to the core!
Frequently asked questions
What do I get when I buy this document?
You get a PDF, available immediately after your purchase. The purchased document is accessible anytime, anywhere and indefinitely through your profile.
Satisfaction guarantee: how does it work?
Our satisfaction guarantee ensures that you always find a study document that suits you well. You fill out a form, and our customer service team takes care of the rest.
Who am I buying these notes from?
Stuvia is a marketplace, so you are not buying this document from us, but from seller RevisionKing. Stuvia facilitates payment to the seller.
Will I be stuck with a subscription?
No, you only buy these notes for $7.49. You're not tied to anything after your purchase.
Can Stuvia be trusted?
4.6 stars on Google & Trustpilot (+1000 reviews)
75323 documents were sold in the last 30 days
Founded in 2010, the go-to place to buy study notes for 14 years now