Economics Multiple Choice Question – 19 December 2017

The price of a product is likely to be lower if?

Select ONE answer:

1. Demand is price inelastic
2. There is limited competition
3. It is in a niche market
4. The product has a USP
5. Entry into the market is easy

Explain and justify your answer:
……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This is multiple choice question is suitable for Economics KS5 classes.

The answer is 5 – If entry into a market is easy then competitors can come in because there are lower barriers to entry and charge a price lower than the incumbents and capture market share which will require a matching action from the incumbents to maintain their market share.

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