O-LevelEconomicsMicroeconomic decision makers2281/12 · May/June 2014 · Q131 Mark

Which market conditions apply to firms that operate in perfect competition and which to a monopoly? [Figure 13]

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Aperfect competition: demand influenced by advertising, monopoly: demand not influenced by advertising

Bperfect competition: many barriers to entry, monopoly: no barriers to entry

Cperfect competition: no influence on price, monopoly: strong influence on price

Dperfect competition: sales of branded products, monopoly: sales of unique products

✓ Correct answer

C: perfect competition: no influence on price, monopoly: strong influence on price

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Topic: Microeconomic decision makers, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2014 Paper 1 Variant 2, question 13.

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