O-LevelEconomicsThe allocation of resources2281/11 · May/June 2010 · Q231 Mark

What is likely to be found when there are many small firms in an industry?

AThere are few barriers to entry.

BThere is high expenditure on research and development.

CThere is little competition.

DVery large capital costs are needed to establish a firm.

✓ Correct answer

A: There are few barriers to entry.

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Topic: The allocation of resources, O-Level Economics (syllabus 2281). Multiple choice, 1 mark.
Source: O-Level Economics, May/June 2010 Paper 1 Variant 1, question 23.

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