market structure

Question 1

sources of monopoly

Answer 1

natural monopoly
high set up cost
limited market size

Question 2

elaborate natural monopoly

Answer 2

economies of scale
insufficient demand to support more than one MTR
duplication of resources mean wastage

Question 3

what is perfect information

Answer 3

all buyers and sellers know all information about the market at all times

Question 4

why identical bottles of red wines are sold in different shops at different prices

Answer 4

different services
imperfect information eg customer do not know which shops sell at a lower price
different production cost eg different rental payment

Question 5

why taxi service is not perfectly competitive

Answer 5

entry is not free
heterogeneous services (4/5 seats)
imperfect information

Question 6

examples of price and non-price competition

Answer 6

set a lower price
with free gift
advertising their shop

Question 7

oligopoly interdependence features

marking scheme ans?

Answer 7

interdependence pricing strategies