| Question | Answer |
| Name 4 characteristics of a monopoly | One supplier.
Controls quantity or price.
Seeks to maximise profit.
Barriers to entry exist. |
| Name 8 barriers to entry | Legal monopoly.
Patent ownership.
Ownership of raw material.
Economies of scale.
Cartels.
Mergers.
Brand loyalty. |
| Is SNP earned in the long run in a monopoly? | Yes |
| Name 5 advantages of a monopoly market structure | Economies of scale.
Guaranteed supply.
Secure employment.
No duplication, less waste of scarce resources.
R&D potential. |
| Name 5 disadvantages of a monopoly market structure | Exploitation of customers.
Inefficient use of scarce resources.
Production of fewer goods at higher prices.
Less innovation |
| What regulates monopolies? | Competition act 2002 |
| Name three divisions set up by the Competition act 2002 | Monopolies division.
Cartels division.
Mergers division. |
| Define deregulation | The removal of government controls from an industry or sector to allow for a free and efficient market place |
| Name three things affected by deregulation | Fall in prices for consumers.
Job risks for employees.
Profits may fall for monopolies. |
| How can state companies increase efficiency? | Appoint experienced entrepreneurs.
Performance related pay.
Deregulation.
Allow companies to form alliances.
Discontinue unprofitable services.
Privatisation.
Limit government interference. |
| Define privatisation | Sale of state companies to private companies |
| Define nationalisation | The purchase of private companies by the state |
