Tag: KS3

Big Staffie plc has recently been able to achieve significant external economies of scale.

This indicates that the market for the company’s only product has been?

Select ONE answer:

1. Static, so forcing the company to achieve economies of scale in production
2. Growing, so enabling the economies of scale to be achieved
3. Contracting, so enabling the company to cut costs in distribution
4. Volatile, meaning that internal economies of scale were unattainable

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > External economies of scale arise by virtue of the market for the product growing, enabling greater levels of business across which to spread the company’s costs.
3. Not correct
4. Not correct

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Which ONE of the following is associated with the conditions of perfect competition?

Select ONE answer:

1. Suppliers are price-makers
2. A single selling price
3. Differentiated products
4. Heavy advertising helps gain extra market share

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 2

1. Not correct
2. Correct == > Suppliers are price-takers meaning that they can sell as much as they supply but only if they sell at the market-determined equilibrium price. Differentiated products and advertising are market imperfections, creating imperfect rather than perfect competition.
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is associated with the conditions of perfect competition?

Select ONE answer:

1. Suppliers are price-makers
2. Differentiated products
3. Consumers lack influence over market price
4. Heavy advertising helps gain extra market share

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 3

1. Not correct
2. Not correct
3. Correct == > Suppliers are price-takers meaning that they can sell as much as they supply but only if they sell at the market-determined equilibrium price. Differentiated products and advertising are market imperfections, creating imperfect rather than perfect competition.
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.

Which ONE of the following is associated with the conditions of perfect competition?

Select ONE answer:

1. Suppliers are price-makers
2. Differentiated products
3. Heavy advertising helps gain extra market share
4. Suppliers earn ‘normal’ profits

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 4

1. Not correct
2. Not correct
3. Not correct
4. Correct == > Suppliers are price-takers meaning that they can sell as much as they supply but only if they sell at the market-determined equilibrium price. Differentiated products and advertising are market imperfections, creating imperfect rather than perfect competition.

This work is licensed under a Creative Commons Attribution 4.0 International License.

In the market for the Big Staffie product competitors tend not to compete through price, instead devoting substantial sums of money to raising consumer awareness through advertising.

There is some degree of differentiation between products, often achieved through branding.

There are many buyers and sellers in the market for the product.

It would appear, therefore, that the market for the Big Staffie product is one characterised by?

Select ONE answer:

1. Monopolistic competition
2. Oligopoly
3. Perfect competition
4. Monopoly

Show your workings to arrive at your answer, and explain and justify your reasons:

……………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………………

This multiple-choice question is suitable for Accounting KS5 classes.

The answer is 1

1. Correct == > The key differentiator here is the large number of competing sellers. The earlier issues identified in the question are shared by both monopolistic competition and oligopoly, but it is the large number of sellers in the market that defines this market specifically as monopolistic competition.
2. Not correct
3. Not correct
4. Not correct

This work is licensed under a Creative Commons Attribution 4.0 International License.