IB Economics
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IB Higher Market Structure Essay Questions
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“Monopoly price is higher and output smaller than is socially ideal. The
public is the victim.” (J.K. Galbraith, 1974)
(a)
Explain the economic reasoning behind the statement that “monopoly
price is higher and output smaller than is socially ideal”.
(b)
Do you agree that the public is always the ‘victim’ of monopoly?
Justify your answer. (M00)
(a)
What are the main assumptions made by economists when discussing
the model of perfect competition?
(b)
Why are these assumptions likely to be unrealistic in practice?
(a)
In what ways do firms operating in different market structures
compete?
(b)
Discuss the view that the more competition there is within each
industry the better. (M04)
(a)
Explain how profit is determined in perfect competition.
(b)
“Whatever the type of market structure, profit maximisation will
always be the only goal of firms.” Discuss (M05)
(a)
Explain the difference between short-run equilibrium and long-run
equilibrium in monopolistic competition.
(b) “Perfect competition is a more desirable market form than monopolistic
competition” Discuss. (N07)
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(a) Explain how barriers to entry may affect market structure.
(b) Evaluate the view that monopoly is an undesirable type of market
structure. (M07)
7
(a) Explain how a firm operating in an oligopolistic market might attempt
to increase its market share.
(b) Evaluate the view that producers and not consumers are the main
beneficiaries of oligopolistic market structures (M08)
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