'A firm is fully aware of market conditions and its best rational interest would be achieved by pursuing the clearly defined objective of maximising profits.' Consider whether this statement has any merit in different market structures.

Mark scheme

Marking points from the official mark scheme (May/June 2020). The mark or mark type is shown in brackets.

1. [25] Candidates should consider each of the assumptions. Is the firm aware of market condition, is its best interest achieved by maximising profits and in which market structure might that be true.
2. [18-25] For a sound discussion of under what market structure the firm will be fully aware of market conditions, and whether it is always best to aim to maximise profits. Consideration of contestable markets, alternative aims, price leadership, lack of information, degrees of competition and lack of information. Maximum 21 no conclusion.
3. [14-17] For a competent comment but with consideration of only part of the assumptions and a less developed analysis.
4. [10-13] For a weak comment on the assumptions and only a brief explanation of alternative aims.
5. [1-9] For an answer that shows some knowledge but does not indicate that the question has been fully grasped or where the answer is mostly irrelevant.