Lesson 4.1.5.1

4.1.5.1 Market structures Quiz: AQA Economics, Unit 1

20 questions

Written by Revision Ninja · Last reviewed 11 October 2026

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Lesson 4.1.5.1, Market structures: 20 multiple choice questions for the AQA Economics (7136), Unit 1: Individuals, firms, markets and market failure, written with Revision Ninja.

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The 20 questions

  1. Which market structure is at the opposite end of the competition spectrum from perfect competition?

    • Oligopoly
    • Duopoly
    • Monopolistic competition
    • Pure monopoly

  2. Which factors are used to distinguish between different market structures?

    • Factors such as the colour of the firms' logos and the content of their advertising slogans
    • The age of the firms' founders and the location of their head offices
    • The number of firms, the degree of product differentiation and ease of entry
    • The total number of employees in the country as a whole, divided by the number of firms

  3. In perfect competition, the degree of product differentiation is:

    • None, because firms sell homogeneous (identical) products
    • High, because each firm sells its own distinct brand
    • Moderate, because products are partly differentiated by branding
    • Total, because each firm controls its own brand image

  4. A market with one seller, high barriers to entry and no close substitutes is best described as:

    • Monopolistic competition
    • Pure monopoly
    • Perfect competition
    • Oligopoly with price wars

  5. Monopolistic competition differs from perfect competition mainly because firms in monopolistic competition:

    • Face a perfectly elastic demand curve for their product, so they can sell any quantity at the single market price
    • Face no entry or exit barriers of any kind, so new firms can enter and leave at no cost in every period of operation
    • Sell identical products and are price takers, just as firms in perfect competition do in their markets
    • Sell differentiated products and have some control over their price

  6. Why is ease of entry important in distinguishing market structures?

    • Low barriers encourage new firms, which tends to limit the market power of existing firms
    • It matters only for firms that hold government licences, since licensed firms are the only ones that can enter a market in practice
    • Ease of entry has no effect on prices or output, because firms set their prices by reference to their own costs and not to any rivals
    • High barriers always increase the number of firms in the market

  7. A market has three firms with shares of 80%, 10% and 10%. The three-firm concentration ratio (CR3) is:

    • 100%
    • 80%
    • 90%
    • 20%

  8. Five firms have market shares of 30%, 25%, 20%, 15% and 10%. The three-firm concentration ratio is:

    • 85%
    • 90%
    • 65%
    • 75%

  9. Which is the best description of a spectrum of market structures?

    • Three discrete categories that never overlap in any market, with each market placed firmly in one category and never in between
    • A ranking based only on the size of each firm's profits
    • A classification using only the government's regulation rules, which decide how many firms may operate in each market sector
    • A range from perfect competition, with many small firms, to pure monopoly, with a single firm

  10. A market has many identical products, free entry and exit, and many small sellers. Which structure is it?

    • Oligopoly with collusion
    • Pure monopoly
    • Perfect competition
    • Monopolistic competition with strong brand loyalty

  11. Which feature most clearly indicates oligopoly rather than monopolistic competition?

    • Many small firms, each with a tiny market share, which means that no single firm can influence the price in the market at all
    • A few large firms whose decisions are interdependent
    • Identical products sold at the market price, so that buyers see no difference between the goods of any firm in the market
    • Free entry and exit in the long run, which allows new firms to enter whenever profits are high and to leave whenever losses appear

  12. Which pair of market structures is typically said to have the largest number of firms?

    • Monopoly and monopsony, which both involve a single firm with substantial power over the price it pays or charges in its market
    • Pure monopoly and oligopoly, which are both dominated by a small number of very large firms in most national economies
    • Perfect competition and monopolistic competition
    • Oligopoly and duopoly, which are both characterised by a few large firms that act interdependently when setting price and output

  13. A market's concentration ratio rises from 40% to 70% over five years. The best interpretation is:

    • Competition has become stronger because the largest firms have shrunk, leaving many new firms able to challenge the market leaders
    • Prices must have fallen by 30% across the market, since the top firms have each lost a third of their revenue to rivals over the period
    • The market is now dominated by a single firm with a fixed share, so competition has disappeared from the market entirely
    • The market has become more concentrated, which may reduce competition if entry remains difficult

  14. A market has 10 firms of equal size. What are CR1 and CR5?

    • CR1 = 5% and CR5 = 25%
    • CR1 = 10% and CR5 = 50%
    • CR1 = 20% and CR5 = 100%
    • CR1 = 50% and CR5 = 10%

  15. Why can market structure be hard to classify in practice?

    • Only the cost of entry, measured in pounds, which is the one factor that determines whether a market is hard or easy for firms to enter
    • The colour of the firms' products and the design of their packaging, which decide whether a market counts as concentrated or not in law
    • The number of consumers in the market and their average income, which together determine how many firms the market can support at once
    • Real markets blend features, and the boundaries of markets and products are not always clear

  16. Which of the following is an example of a barrier to entry?

    • Prices set by government for every firm in the market
    • Free access to all inputs and public information
    • A large number of close substitutes for the product
    • Patents, economies of scale and high start-up costs

  17. Which statement best links market structure to efficiency?

    • Perfect competition produces less output than monopoly at every price
    • Firms with market power may restrict output and raise price, reducing allocative efficiency compared with perfect competition
    • Monopoly always leads to high prices and low output, so any firm that has market power will restrict output in every case
    • Market structure has no effect on efficiency because it only affects the demand for a product and never affects the costs of production

  18. Which market structure has many firms selling differentiated products with relatively easy entry?

    • Perfect competition, with many firms selling identical goods at one market price
    • Oligopoly, with a few large interdependent firms that watch each other closely
    • Pure monopoly, with a single seller that faces no close competitors in its market
    • Monopolistic competition

  19. What does a concentration ratio measure?

    • The average profit earned by all firms in an industry, which shows how much money each firm earns after its costs are deducted
    • The price elasticity of demand for a product in a market, which shows how strongly buyers respond to a change in the price charged
    • The total number of consumers who buy in a market, counted each year as a share of the total population of the country
    • The degree of concentration in an industry, based on the combined market share of its largest firms

  20. The key difference between a pure monopolist and a monopolistically competitive firm is that the monopolist:

    • Has many firms with identical costs and free entry into its market, so that its profits are competed away by new rivals
    • Faces no close substitutes for its product, while the monopolistic competitor faces many close substitutes
    • Sells identical products at the market price set by many competing firms, so its price is the same as every rival's price
    • Has no price-setting power at all in its market, because it must accept the price that is set by the wider industry

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