'Competition is an essential element of an efficient market economy. If there is a monopoly then there is no competition. Monopolies exist in all economies and, therefore, all economies must be inefficient.' Discuss this opinion.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

1. [25] Explanation of meaning of efficiency and explanation of the analysis which ensures an efficient optimum may be reached.
2. [25] Productive efficiency makes the best use of resources and allocative efficiency ensures that no one can be made better off without someone being worse off.
3. [25] Comment on whether this necessarily occurs in a market economy where monopoly exists. There is a difference between the theoretical and practical definition of monopoly.
4. [25] Comment on whether all monopolies are necessarily inefficient or whether they might achieve some productive efficiency.
5. [25] There may be monopolies in some industries but not others, some monopolies might promote research, so the effect is not uniform throughout the economy.
6. [25] Conclusion about whether the idea of a market efficient economy is untenable.