More agricultural markets come close to perfect competition than markets for manufactured goods and for services. The goals of business organisations can vary between markets, and within markets. In 2017, the Nigerian government used supply-side policy measures to influence the goals and performance of firms in a range of markets and to lower firms' average costs of production.

Mark scheme

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

1. [1] (a) many buyers
2. [1] (a) many sellers
3. [1] (a) no barriers to entry (and exit)
4. [1] (a) (firms are) price takers
5. [1] (a) Identical / homogeneous product
6. [1] (a) no attachment between buyers and sellers
7. [1] (a) perfect knowledge
8. [1] (b) Profit maximisation
9. [1] (b) making as much profit as possible / increasing the gap between revenue and cost / rewarding entrepreneurs
10. [1] (b) Growth / expansion
11. [1] (b) increasing the size of the firm by e.g. merging / seeking to gain market power
12. [1] (b) to take advantage of economies of scale
13. [1] (b) Survival
14. [1] (b) during difficult times such as recession / when a firm is first established the aim may just be to stay in the market
15. [1] (b) Profit satisficing
16. [1] (b) achieving enough profit to keep shareholders' happy while following other objectives
17. [1] (b) Social welfare
18. [1] (b) business organisations operating in the public sector may e.g. be concerned about the environment / charging a low price to help the poor
19. [1] (c) Type of business organisation
20. [1] (c) state-owned enterprises and multinational companies operate on a larger scale than sole traders
21. [1] (c) Size of market
22. [1] (c) the market for some products is large / expanding
23. [1] (c) example
24. [1] (c) while others are declining
25. [1] (c) example
26. [1] (c) Some firms have more access to finance
27. [1] (c) public limited companies can sell shares
28. [1] (c) sole traders cannot
29. [1] (c) Some firms grow through merging
30. [1] (c) type of merger e.g. horizontal merger
31. [1] (c) Motives of owners
32. [1] (c) e.g. some prefer the firm to remain small so that they can retain control / ownership
33. [1] (c) Some firms may be subsidised
34. [1] (c) which may encourage them to produce a higher output
35. [1] (c) Some firms may be more profitable
36. [1] (c) can reinvest profits / internal growth
37. [1] (c) Length of time in the market
38. [1] (c) longer there, more time to grow
39. [1] (c) Some firms may be able to take advantage of economies of scale
40. [1] (c) example of an economy
41. [1] (c) Some firms may experience diseconomies of scale
42. [1] (c) example
43. [1] (c) Type of product / capital v. labour-intensive
44. [1] (c) e.g. aircraft have to be produced on a large scale
45. [1] (d) Education and training
46. [1] (d) should increase labour productivity
47. [1] (d) this could reduce labour costs
48. [1] (d) A cut in income tax
49. [1] (d) may reduce upward pressure on wages
50. [1] (d) A cut in indirect taxes
51. [1] (d) Privatisation
52. [1] (d) may make firms more efficient
53. [1] (d) especially if there is competition in the market
54. [1] (d) Deregulation
55. [1] (d) may reduce the cost of complying with rules and regulations
56. [1] (d) Subsidies
57. [1] (d) may enable firms to buy more efficient machinery
58. [1] (d) train workers
59. [1] (d) may be able to take advantage of economies of scale
60. [1] (d) Remove tariffs
61. [1] (d) enable firms to get raw materials at lower prices
62. [1] (d) Spending on infrastructure
63. [1] (d) reducing transport costs
64. [1] (d) Education and training may not be in the areas in demand
65. [1] (d) may not increase workers' skills
66. [1] (d) some workers who are educated / trained may emigrate
67. [1] (d) Wages of workers may rise by more than productivity
68. [1] (d) increasing labour costs
69. [1] (d) Privatised firms may become private sector monopolies
70. [1] (d) this will reduce pressure on them to keep costs down
71. [1] (d) Subsidies may be given to reduce unemployment / maintain employment
72. [1] (d) additional workers may be less productive
73. [1] (d) may experience diseconomies
74. [1] (d) There may be corruption