AQA · Microeconomics · Market structures

AQA Economics past paper questions: Market structures

Every AQA question on Market structures from 2016 to 2025: 19 essays, 32 data response questions and 58 multiple choice questions. It covers Monopoly & market power, Oligopoly, Perfect competition, Competition policy & regulation and Contestability & barriers. Each question links to its paper, mark scheme and examiner report.

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SubtopicsMonopoly & market power 37Oligopoly 28Perfect competition 16Competition policy & regulation 16Contestability & barriers 13Revenue & profit 12Monopolistic competition 8Business objectives & growth 8Technological change 3Productivity & efficiency 3Commodity markets 2Market failure (general) 2Discrimination & pay gaps 1Globalisation 1Government failure 1

Essay questions on market structures

A-level Paper 1, June 2024, Q11Explain15 marks
Explain the likely impact on consumer surplus and producer surplus as an industry moves away from a competitive market structure to one that is dominated by a few large firms.

Examiner insight

What to cover
As a market moves from competition to oligopoly, price rises and output falls. Consumer surplus falls, part of it becomes producer surplus, and a deadweight loss appears.
Watch out
Label every area on the diagram.
Question paper p.6Mark scheme p.19Examiner report p.7Open in the toolPractise the monopoly diagram
A-level Paper 1, June 2023, Q9Explain15 marks
Explain why, in long-run equilibrium, monopolistically competitive markets are neither productively nor allocatively efficient.

Examiner insight

What to cover
In long-run equilibrium, price is above MC, so the firm is not allocatively efficient. The AR curve is tangent to AC on its falling part, so output is below minimum AC and the firm is not productively efficient (excess capacity).
Watch out
Show both conditions on the diagram and name excess capacity.
Question paper p.6Mark scheme p.17Examiner report p.6Open in the toolPractise the monopolistic competition diagram
A-level Paper 1, June 2023, Q13Explain15 marks
Explain how market contestability affects the performance of an industry.

Examiner insight

What to cover
In a contestable market, barriers to entry and exit are low, so incumbents fear hit-and-run entry. They keep prices close to average cost, make normal profit and act efficiently, even if there are few firms.
Watch out
Explain the role of sunk costs and hit-and-run competition.
Question paper p.7Mark scheme p.21Examiner report p.8Open in the toolPractise the monopoly diagram
A-level Paper 1, November 2021, Q9Explain15 marks
Explain how perfect competition should lead to outcomes which are both productively and allocatively efficient.

Examiner insight

What to cover
In long-run equilibrium, firms make normal profit. Price equals MC, so the value consumers place on the last unit equals its cost (allocative efficiency). Output is at the lowest point of average cost (productive efficiency).
Watch out
Explain why entry and exit drive the firm to the bottom of the AC curve.
Question paper p.6Mark scheme p.16Open in the toolPractise the perfect competition diagram
A-level Paper 1, November 2021, Q10Evaluate25 marks
Evaluate the view that technological change tends to bring industries closer to the market structure of perfect competition.

Examiner insight

What to cover
Technology lowers entry barriers (online selling, cheaper equipment), improves price information and increases the number of sellers, so markets become more competitive.
Watch out
Use named examples from both sides. The best answers say when each effect is stronger.
Question paper p.6Mark scheme p.17Open in the tool
A-level Paper 1, June 2017, Q9Explain15 marks
Explain how price and output are determined for a firm in a monopolistically competitive market, in both the short run and the long run.

Examiner insight

What to cover
Short run: profit-maximising at MC = MR, possible supernormal profit. Long run: new entry shifts demand left until AR is tangent to AC, giving normal profit.
Watch out
The tangency point in the long run is the key mark. Draw AR tangent to AC, not crossing it.
Question paper p.6Mark scheme p.17Open in the toolPractise the monopolistic competition diagram
A-level Paper 1, June 2017, Q10Evaluate25 marks
Evaluate the view that government regulation of monopolistically competitive markets is unnecessary, and that polices to encourage competition and prevent the abuse of monopoly power should focus entirely on oligopolies and monopolies.

Examiner insight

What to cover
Monopolistic competition has many firms, low barriers and normal profit in the long run, so the case for regulation is weaker.
Watch out
Do not argue that monopolistic competition is perfectly efficient. It is neither productively nor allocatively efficient.
Question paper p.6Mark scheme p.18Open in the toolPractise the monopolistic competition diagramPractise the monopoly diagram
A-level Paper 1, Specimen, Q9Explain15 marks
Explain why firms, such as Apple, might be able to charge different prices for the same product in different markets.

Examiner insight

What to cover
State the conditions for price discrimination: market power, separable markets, different price elasticities, no resale.
Watch out
Use the Apple example. Generic lists of conditions without application score lower.
Question paper p.6Mark scheme p.14Open in the tool

Data response questions on market structures

A-level Paper 1, June 2025, Q8Assess25 marks

Context 2: The UK water industry

Extract F (lines 5–6) states: ‘if regulators impose fines, these costs may be passed on to consumers or reduce investment’. Using the data in the extracts and your knowledge of economics, assess the view that stronger regulation would be a better policy than bringing the water industry back into public ownership.

Examiner insight

What to cover
Stronger regulation: price caps, investment targets, fines.
Watch out
Use the data in the extracts.
Question paper p.5Mark scheme p.14Examiner report p.6Open in the toolPractise the natural monopoly diagram
A-level Paper 1, June 2022, Q7Analyse9 marks

Context 2: The UK supermarket sector

Extract E (lines 16–17) states that, ‘Supermarkets set prices interdependently, and price wars look very likely.’ With the help of a diagram, analyse the impact on grocery consumers of interdependence between supermarkets.

Examiner insight

What to cover
Interdependent firms consider rivals' reactions. Prices can become rigid (kinked demand), firms compete on loyalty cards and quality, or a price war breaks out and prices fall.
Watch out
Explain what each outcome means for consumers: prices, choice and quality.
Question paper p.5Mark scheme p.12Examiner report p.5Marked student answers p.22Open in the toolDraw it: kinked demand diagram
A-level Paper 1, June 2022, Q8Evaluate25 marks

Context 2: The UK supermarket sector

Extract E (lines 17–19) states that, ‘the price gap between discounters and conventional supermarkets is now about 10–12%, against more than 20% a few years ago.’ Evaluate the view that the supermarket sector is serving customers' interests well.

Examiner insight

What to cover
Serving consumers well: discounters have forced prices down, choice is wide, online delivery has grown.
Watch out
Use the price gap data. The trend matters more than a single year.
Question paper p.5Mark scheme p.14Examiner report p.5Marked student answers p.28Open in the tool
A-level Paper 3, June 2022, Q31To what extent10 marks

Case study: The commercial aircraft manufacturing industry

To what extent do the data support the view that Boeing has been more successful than Airbus since 2014? You must use the data in Extract B to support your assessment.

Examiner insight

What to cover
Compare Boeing and Airbus on orders, deliveries, revenue and profit.
Watch out
Quote numbers from Extract B.
Question paper p.20Mark scheme p.5Insert p.3Examiner report p.6Marked student answers p.4Open in the tool
AS Paper 1, June 2022, Q25Explain10 marks

Context 1: Water

Extract B (lines 13–14) states: ‘Most water (and sewerage) services are not provided by competitive markets... Only businesses can choose their water supplier’. Explain how firms in the water industry could compete to attract businesses or other customers.

Examiner insight

What to cover
Firms can compete on price, customer service, water-saving advice, billing and contract terms for business customers.
Watch out
Explain two ways clearly.
Question paper p.16Mark scheme p.10Insert p.1Open in the tool
A-level Paper 1, November 2021, Q3Explain9 marks

Context 1: The pharmaceutical industry

Extract B (lines 9–10) states: ‘After the monopoly’s patent expires, other companies can manufacture and market the same drug under its generic name, usually at a lower price.’ With the help of a diagram, explain why prices of pharmaceutical drugs supplied by a monopoly are likely to be higher than in markets which are more competitive.

Examiner insight

What to cover
A monopoly faces the market demand curve and sets output where MC = MR. Price is above MC, output is lower and supernormal profit persists because patents block entry. In a competitive market, price would be closer to MC.
Watch out
Name patents as the barrier to entry. Once the patent ends, generic competition brings prices down.
Question paper p.3Mark scheme p.7Open in the toolDraw it: monopoly diagram
A-level Paper 1, November 2021, Q4Assess25 marks

Context 1: The pharmaceutical industry

Extract C (lines 1–3) states: ‘The market for most generic drugs is oligopolistic, with just two or three manufacturers making each product. This enables significant economies of scale within firms, but also presents the risk of consumer interests being harmed.’ Using the extracts and your knowledge of economics, assess the view that the market structure of the pharmaceutical industry is damaging for consumers.

Examiner insight

What to cover
Damaging: monopoly pricing under patents, oligopoly in generics with few firms, risk of collusion, high prices for health systems.
Watch out
Use the data on price rises and generic drug markets in the extracts.
Question paper p.3Mark scheme p.9Open in the toolPractise the monopoly diagram
A-level Paper 1, June 2019, Q8Evaluate25 marks

Context 2: The British railway system

Extract F (lines 9–10) suggests that ‘the British public really don't care about who runs the trains; what they care about is reliability, comfort and price.’ Use the extracts and your knowledge of economics to evaluate the case for renationalising railways in the UK.

Examiner insight

What to cover
Case for renationalisation: natural monopoly, public good elements, coordination, lower cost of borrowing.
Watch out
Keep the focus on what the public cares about: reliability, comfort and price.
Question paper p.5Mark scheme p.14Open in the tool
A-level Paper 1, June 2018, Q4Assess25 marks

Context 1: Competition in UK Banking

Extract B (lines 4–6) states that ‘banks do not feel enough pressure to compete on price or quality, leading some to call for the Big Four to be split into a number of smaller banks.’ Use the extracts and your knowledge of economics to assess the view that the government should intervene further in the banking sector to promote greater competition.

Examiner insight

What to cover
Explain the problems of the Big Four: market power, weak switching, higher prices. Discuss options: break-ups, switching schemes, open banking, lower entry barriers.
Watch out
Use data in the extracts on switching rates. Answers without data lose application marks.
Question paper p.3Mark scheme p.10Open in the tool
A-level Paper 3, June 2018, Q33Recommend25 marks

Case study: The World Energy Market

After considering Extract E, and the original evidence in Extracts A, B, C and D, would you recommend to the members of OPEC that they continue to restrict the supply of oil to try to raise the world market price of oil? Justify your recommendation.

Examiner insight

What to cover
Restricting supply raises price when demand is inelastic, but encourages alternative energy and cheating in the cartel.
Watch out
Recommendation with conditions.
Question paper p.29Mark scheme p.10Insert p.2Open in the tool
A-level Paper 1, June 2017, Q3Explain9 marks

Context 1: Privatisation of Royal Mail

Extract B (lines 12–14) states that ‘The Universal Postal Service obligations require Royal Mail to deliver letters and parcels to all parts of the country six days a week’. With the help of a monopoly diagram, explain how the Universal Postal Service obligations are likely to affect Royal Mail’s costs and profits.

Examiner insight

What to cover
The universal service obligation raises costs, especially to rural areas. Show higher average costs reducing supernormal profit.
Watch out
Label the profit area before and after. Many answers change the curves but never show the profit effect.
Question paper p.3Mark scheme p.8Open in the toolDraw it: monopoly diagram
A-level Paper 1, June 2017, Q4Assess25 marks

Context 1: Privatisation of Royal Mail

Extract C (line 2) states that ‘Many competitors are using digital technology to drive innovation’. Use the extracts and your knowledge of economics to assess whether the benefits outweigh the costs when the Government privatises organisations such as Royal Mail and opens up the market to competition.

Examiner insight

What to cover
Benefits of privatisation: efficiency, innovation, lower prices through competition, revenue for the government. Costs: loss of universal service, private monopoly power, job cuts.
Watch out
The question asks about benefits against costs. End with a clear judgement.
Question paper p.3Mark scheme p.10Open in the tool
AS Paper 1, June 2017, Q25Explain10 marks

Context 1: Supermarkets

Extract B (lines 2–3) refers to ‘the monopoly power of well-established firms’ in the supermarket industry. Explain two factors that could influence the monopoly power of firms in the supermarket industry.

Examiner insight

What to cover
Factors: barriers to entry (economies of scale, sites), the number and size of rivals, brand loyalty, buying power over suppliers, and the growth of discounters.
Watch out
Explain two factors clearly and apply them to supermarkets.
Question paper p.16Mark scheme p.10Insert p.1Open in the tool
AS Paper 1, June 2017, Q26Assess25 marks

Context 1: Supermarkets

Extract C (lines 16–17) states ‘have the changes in the supermarket industry been for the better, and if so, for whom?’ Use the extracts and your knowledge of economics to assess whether the changes in the supermarket industry are likely to be better or worse for consumers and firms.

Examiner insight

What to cover
Changes: the rise of discounters (Aldi, Lidl), price competition, online shopping and store closures.
Watch out
Cover both consumers and firms.
Question paper p.18Mark scheme p.11Insert p.1Open in the tool
AS Paper 1, June 2016, Q25Explain10 marks

Context 1: The UK housing market

Extract B (lines 10 and 11) states ‘However, the housing market is not a perfectly competitive market.’ Explain why the housing market is not a perfectly competitive market.

Examiner insight

What to cover
Perfect competition needs many buyers and sellers, identical products, perfect information and free entry. Housing fails these: every home is different, information is imperfect, entry is limited by land and planning, and transaction costs are high.
Watch out
Compare the housing market with each condition of perfect competition.
Question paper p.15Mark scheme p.10Insert p.1Open in the tool
A-level Paper 1, Specimen, Q3Explain9 marks

Context 1: The UK energy market

Extract B (lines 11–12) states that there is ‘no evidence of collusion between energy suppliers to date.’ With the help of a diagram, explain how collusion between energy suppliers could affect the retail prices paid by consumers.

Examiner insight

What to cover
Explain how colluding firms act like a single monopolist: they restrict output and raise price above the competitive level. Link to the few large energy suppliers in the extract.
Watch out
Do not just define collusion. Marks come from the chain: agreement, lower output, higher price, higher profit.
Question paper p.3Mark scheme p.7Open in the toolDraw it: monopoly diagramOr: kinked demand diagram

Multiple choice questions

  1. A-level Paper 3, June 2025, Q15

    A large company experiences a significant fall in its year-end profits. Reports suggest it is a consequence of the divorce of ownership from control within the company. Which one of the following is most likely to explain why the divorce…

  2. A-level Paper 3, June 2025, Q19

    Figure 5 shows the average cost (AC), marginal cost (MC), average revenue (AR) and marginal revenue (MR) curves for a firm in a perfectly competitive market. The entry of new firms shifts the AR and MR curves from AR1 = MR1 to AR2 = MR2…

  3. A-level Paper 3, June 2025, Q20

    Figure 6 shows the average revenue (AR), marginal revenue (MR) and marginal cost (MC) curves of a train-operating firm for peak-time and off-peak passengers. It also shows the price (P1) that all passengers currently pay. Figure 6 The…

  4. A-level Paper 3, June 2025, Q27

    Which one of the following statements regarding UK competition policy is correct?

  5. AS Paper 1, June 2025, Q4

    A firm hopes to increase its market share by setting its prices lower than most of its competitors. What is the most likely reason for this strategy?

  6. AS Paper 1, June 2025, Q9

    A firm uses a variety of strategies to improve its market position. Which one of the following strategies is most likely to benefit consumers in the long run?

  7. AS Paper 1, June 2025, Q10

    Table 1 shows the percentage market share of firms in a particular industry in 2020 and 2023. Table 1 Market share (%), 2020 Market share (%), 2023 Firm 1 28 Firm 2 24 Firm 3 20 Firm 4 18 Firm 5 3 All other firms 7 What was the change in…

  8. A-level Paper 3, June 2024, Q11

    Figure 4 shows the short-run average costs (AC), marginal costs (MC), average revenue (AR) and marginal revenue (MR) curves for a typical firm in a monopolistically competitive market. Figure 4 In the long run, market forces are most…

  9. A-level Paper 3, June 2024, Q12

    According to the kinked demand curve model of oligopoly, which one of the following would be most likely to explain price stability in an oligopolistic market?

  10. AS Paper 1, June 2024, Q6

    In a perfectly competitive market, a firm is most likely to

  11. AS Paper 1, June 2024, Q9

    Which one of the following is most likely to be used to help identify the market structure of an industry?

  12. AS Paper 1, June 2024, Q14

    Over time, one of the firms in the market for electric scooters acquires some monopoly power. The firm decides to restrict output below the competitive market level. The most likely consequence of this decision will be

  13. A-level Paper 3, June 2023, Q8

    Figure 3 shows the marginal cost (MC) and average total cost (ATC) curves for a firm in the short run in a perfectly competitive market. It also shows the firm’s marginal revenue (MR) and average revenue (AR) curves. Figure 3 What changes…

  14. A-level Paper 3, June 2023, Q9

    In 2020, the market leader sold around three times as many vacuum cleaners in the UK as its closest rival. The market leader’s dominance was built on technical innovation, protected by legal patents. However, rivals have developed their…

  15. A-level Paper 3, June 2023, Q15

    Which one of the following is the most likely result of a divorce of ownership from control in an organisation?

  16. A-level Paper 3, June 2023, Q24

    Regulatory capture describes a situation in which

  17. AS Paper 1, June 2023, Q7

    Which one of the following is a source of monopoly power?

  18. AS Paper 1, June 2023, Q12

    Table 1 shows the market shares of supermarkets in an economy in 2020. Table 1 Company % share of market Fresh Co Food Co Value Co Other companies In 2021, Value Co fails to make any profits and decides to leave the market. The most likely…

  19. AS Paper 1, June 2023, Q20

    Which one of the following characteristics of firms can be used to distinguish between market structures?

  20. A-level Paper 3, June 2022, Q9

    A firm charging different customers different prices for the same product is practising

  21. A-level Paper 3, June 2022, Q19

    Figure 5 shows the average revenue (AR), marginal revenue (MR) and marginal cost (MC) curves for an industry which was perfectly competitive but is now a monopoly. The cost and revenue curves remain unchanged. Figure 5 Which of the…

  22. A-level Paper 3, June 2022, Q20

    There is a reduction in the market demand for the product supplied by firms operating in a perfectly competitive industry. All other things being equal, which one of the following will happen to firms’ average and marginal revenue as a…

  23. A-level Paper 3, June 2022, Q24

    Figure 7 shows the average revenue and marginal revenue (AR and MR) curves and the average cost and marginal cost (AC and MC) curves for a firm in monopolistic competition in the short run. Figure 7 At the profit maximising price and…

  24. AS Paper 1, June 2022, Q6

    Which one of the following best describes the market conditions for a firm in a perfectly competitive market?

  25. AS Paper 1, June 2022, Q16

    Which one of the following is most likely to increase barriers to firms wishing to enter a market?

  26. AS Paper 1, June 2022, Q18

    A firm that is a pure monopoly can result in market failure because

  27. A-level Paper 3, November 2021, Q16

    Figure 5 shows the demand (D) curve and the average and marginal cost (AC and MC) curves for a firm operating in a perfectly competitive market for eggs. Figure 5 The firm is in equilibrium at the initial market price of £1.25 for a box of…

  28. A-level Paper 3, November 2021, Q20

    A monopolistically competitive firm’s demand curve for good X has a price elasticity of demand of minus 1.0 throughout its entire range. All other things being equal, which one of the following is most likely to result in an increase in…

  29. A-level Paper 3, November 2021, Q21

    Figure 7 shows the average and marginal revenue (AR and MR) curves and the average and marginal cost (AC and MC) curves for a firm. The firm is in equilibrium producing an output of Qe. Figure 7 From the diagram it can be inferred that the

  30. A-level Paper 3, November 2020, Q8

    Figure 2 shows the equilibrium position, point E, of a profit-maximising firm in a monopolistically competitive industry. Figure 2 All other things being equal, which one of the following applies to the firm’s equilibrium at point E? The…

  31. A-level Paper 3, November 2020, Q28

    Table 5 contains data for a firm’s marginal cost of producing different outputs of shirts per day. The firm operates in a perfectly competitive market. Table 5 Output of shirts per day Marginal cost (£s) 800 900 1000 1100 If the market…

  32. AS Paper 1, June 2020, Q14

    Which one of the following helps to explain why profits are likely to be lower in a perfectly competitive market than in a monopoly market?

  33. A-level Paper 3, June 2019, Q1

    A monopolistically competitive firm’s demand curve is

  34. A-level Paper 3, June 2019, Q18

    The diagram below shows the kinked demand curve (D) for a firm operating in a competitive oligopolistic market. The kinked demand curve model provides an explanation of why the

  35. A-level Paper 3, June 2019, Q27

    The diagram below shows the average revenue and marginal revenue (AR and MR) curves, and the average cost and marginal cost (AC and MC) curves, for the only firm in an industry. If the market is highly contestable, in the long run, the…

  36. AS Paper 1, June 2019, Q8

    The following table shows the market shares of the five leading manufacturers in a particular industry. Manufacturer Market share (%) Firm A Firm B Firm C Firm D Firm E Others If Firm A and Firm C combine to become one firm, what happens…

  37. AS Paper 1, June 2019, Q10

    Two large firms dominate the market for manufacturing rail track. This means that

  38. AS Paper 1, June 2019, Q15

    Which one of the following is a true statement about market structures? Market structures

  39. A-level Paper 3, June 2018, Q21

    The diagram below shows a firm operating in perfect competition in the short run. Which quantity, OE, OF, OG or OH, indicates the output where profits are maximised?

  40. A-level Paper 3, June 2018, Q24

    Globalisation can make some product markets more contestable. Which one of the following characteristics of globalisation is the most likely explanation for such an increase in contestability?

  41. A-level Paper 3, June 2018, Q26

    Which one of the following is most likely to measure the degree of competition in an oligopolistic industry?

  42. AS Paper 1, June 2018, Q13

    In an economy hit by a recession, the owner of a small firm decides to continue to operate despite making losses. This decision suggests that

  43. AS Paper 1, June 2018, Q19

    Firms in an industry with a high concentration ratio will typically experience

  44. A-level Paper 3, June 2017, Q8

    The diagram below shows the cost and revenue curves for a monopoly. At which one of the following levels of output would the firm be productively efficient?

  45. AS Paper 1, June 2017, Q2

    Which one of the following sets of characteristics can best be used to distinguish between different market structures?

  46. AS Paper 1, June 2017, Q19

    If firms in an industry increase their spending on advertising, it is likely to

  47. AS Paper 1, June 2017, Q20

    The diagram below shows the market demand curve (D) for a product. The market is currently operating as a monopoly with price P1 and output Q1. If barriers to entry to the market are removed, the most likely result will be that

  48. AS Paper 1, June 2016, Q4

    Monopoly can provide an example of market failure because firms with monopoly power

  49. AS Paper 1, June 2016, Q11

    Which one of the following is the best indicator of the degree of competition in an industry?

  50. AS Paper 1, June 2016, Q12

    The table below shows the characteristics of four private sector firms. Which one of the firms, A, B, C or D, is most likely to be in a competitive market? Barriers to Firm Profit entry

  51. AS Paper 1, June 2016, Q16

    The diagram below illustrates a market in which a monopolist takes control and sets a price above the competitive level. The price charged by the monopolist is OS. If the market had been competitive, the price would have been OR. Under…

  52. A-level Paper 3, Specimen, Q26

    The diagram below shows the cost and revenue curves for a firm in a perfectly competitive market. All other things being equal, the firm

  53. A-level Paper 3, Specimen, Q30

    The diagrams below show the peak and off-peak travel markets for a price-discriminating train operating company. The firm is a monopolist and the costs in both markets are the same. To maximise profits, how much should be supplied in each…

  54. AS Paper 1, Specimen, Q4

    A profit-maximising firm with market power is most likely to use that market power to

  55. AS Paper 1, Specimen, Q8

    Which one of the following is most likely to make a market more competitive?

  56. AS Paper 1, Specimen, Q18

    The basic model of monopoly suggests inefficiency and a misallocation of resources. This could be explained by monopolists

  57. AS Paper 1, Specimen, Q19

    The table below shows the world beer market share (%) by volume for brewing companies. Company Market share (%) AB InBev SABMiller Heineken Carlsberg Molson Coors Grupo Modelo Tsingtao Beijing Yanjing FEMSA Other Total 100 From the data in…

  58. AS Paper 1, Specimen, Q20

    In the table below, all other things being equal, which combination of factors A, B, C or D is most likely to enable a firm in a competitive market to increase its market share? Price elasticity Firm’s degree Firm’s long of demand for of…

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