A businessman claimed it was difficult to make decisions as his business was subject to uncertainty and interdependence. Discuss the methods used by oligopoly firms to reduce uncertainty and interdependence and the extent to which these methods exploit the consumer.

Mark scheme

Marking points from the official mark scheme (May/June 2018). The mark or mark type is shown in brackets.

1. Explanation of oligopoly market structure, which gives rise to uncertainty and interdependence. Discussion of methods used to reduce these problems (Collusion, Non-price competition or Other) and the impact of these on the consumer.
2. L4 (18-25 marks) For discussion of the methods used in oligopolistic competition to reduce uncertainty and interdependence and which considers the likely impact on the consumer. Maximum 21 if no conclusion.
3. L3 (14-17 marks) For a competent analysis and a more limited discussion of the methods used and their impact on the consumer.
4. L2 (10-13 marks) For accurate though undeveloped explanation.
5. L1 (1-9 marks) For an answer which shows some knowledge but does not indicate that the question has been fully grasped, or where the answer contains irrelevancies and errors of theory.