Lesson 2.5.3
2.5.3 The competitive environment and market size Quiz: Pearson Edexcel Business, Unit 2
20 questions
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Lesson 2.5.3, The competitive environment and market size: 20 multiple choice questions for the Pearson Edexcel Business (9BS0), Unit 2: Managing business activities, written with Revision Ninja.
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The 20 questions
-
How is market share expressed as a percentage?
- Output volume
- Sales proportion
- Revenue total
- Profit proportion
-
What does a four-firm concentration ratio measure?
- Market growth
- Price elasticity
- Total revenue
- Market concentration
-
What term describes factors that make it difficult for new firms to enter an industry?
- Barriers to entry
- Economies of scale
- Trade restrictions
- Exit costs
-
Which market structure is dominated by a small number of large firms?
- Oligopoly
- Perfect competition
- Monopolistic competition
- Monopoly
-
Which market structure has many firms selling identical products with no price control?
- Perfect competition
- Monopoly
- Monopsony
- Oligopoly
-
What term describes a market served by a single dominant seller?
- Monopoly
- Oligopoly
- Duopoly
- Cartel
-
Which of the following is a financial barrier to market entry?
- High profit margins
- Weak customer loyalty
- High start-up capital
- Low corporation tax
-
A market is worth 5 million units a year and a firm sells 750,000 units. What is its market share?
- 13.3%
- 75%
- 15%
- 7.5%
-
Four firms in a market have shares of 30%, 25%, 10% and 5%. What is the four-firm concentration ratio?
- 70%
- 60%
- 85%
- 40%
-
A firm's sales stay at 400,000 units while total market sales rise from 2 million to 2.5 million. What happens to its market share?
- Falls to 10%
- Stays at 20%
- Rises to 25%
- Falls to 16%
-
A firm holds a 40% share of a market worth 50 million pounds. What are its sales in pounds?
- 40 million pounds
- 20 million pounds
- 5 million pounds
- 10 million pounds
-
Which condition strongly indicates a highly competitive market?
- Single dominant supplier
- Strong brand protection
- Low customer loyalty
- High profit margins
-
A firm's market share falls as the market grows. What does this indicate?
- Achieving monopoly power
- Reducing variable costs
- Entering a niche market
- Losing share to rivals
-
Which strategy is most likely used by established firms to deter new market entrants?
- Cutting marketing spend
- Reducing product quality
- Aggressive pricing
- Raising retail prices
-
What type of monopoly exists when a single business supplies an isolated village?
- Local monopoly
- Natural monopoly
- Global monopoly
- Legal monopoly
-
What is a potential disadvantage of holding a very large market share?
- Higher production costs
- Lower brand awareness
- Regulatory scrutiny
- Weaker bargaining power
-
How do small firms typically survive when competing against large market leaders?
- Horizontal integration
- Price leadership
- Mass market discounting
- Niche differentiation
-
A dominant firm operates in a market with very low barriers to entry. What constrains its pricing?
- High fixed overheads
- Threat of new entrants
- Strict trade unions
- Falling raw material costs
-
What benefits small firms most in a rapidly growing market?
- Zero rival reaction
- Lower fixed costs
- Easier price control
- Rising total demand
-
Why might a firm's market share calculation be misleading?
- Total industry sales
- Exchange rate fluctuations
- High fixed costs
- Value versus volume
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