JC Economics Market Structures Essay Questions
Just like any game, knowing the rules of the game will certainly help you to understand and to win the game more effortlessly. This is the same for your upcoming Prelims or eventual GCE A-Level Econs exams for H2 students, focusing on essays on Market Structures. And one of the short-cuts for your H2 Econs (9757 Syllabus) is to look through a list of questions because they give you a specific way to process your thinking, and also to check whether you are familiar with the content topic you wish to focus on in JC Economics exams.
Often students struggle with essays because they see an novel question and they panic, or simply copy-&-paste from lecture notes. One easy way to solve this is to be exposed to the possible questions for the major topics so that you will be well-prepared. You need to become used to this process of looking at an unfamiliar question and connecting it with content knowledge you have— this is the key to scoring for H2 Economics.
Here is the listing of Market Structures essay question list:
Q1. Cathay Cineplexes is exploring the viability of going “ticketless” using mobile apps and the possibility of showcasing movies in 4D in the foreseeable future.
(a) Explain how a firm like Cathay Cineplexes is likely to determine its output and pricing decisions. [10]
(b) Discuss if product differentiation is the best way for cinema operators in Singapore to compete. [15]
(price discrimination)
Q2. Singapore’s latest attraction, Gardens by the Bay, comprises an Outdoor Gardens with free entry and two Cooled Conservatories with entry charges. Those living in Singapore, whether Singapore citizens or foreign residents, are charged the same lower rates, compared to tourists.
(a) Explain whether the above case is an example of price discrimination.
(b) To what extent is the practice of price discrimination beneficial?
(price discrimination)
Q3(a) Explain with diagrams how airlines and small clothing retailers engage in price discrimination and why are they able to do so.
Q3(b) Discuss the extent to which these firms aim to maximise profits according to traditional economic theory. [13]
(price discrimination)
Q4. Microsoft invests billions on Research and Development (R & D) which has contributed to a stream of innovations that have transformed business and the homes. To encourage innovation, intellectual property rights are given to innovators for a period of exclusivity to earn a reasonable return on their investment.
Source: The Straits Times
(a) Explain how barriers to entry affect a firm’s pricing behaviour and profits earned.
(b) To what extent is Microsoft’s market power justified?
(Monopoly & Oligopoly)
Q5(a) Explain how perfectly and imperfectly competitive firms determine their price and output to maximize profits. [10]
Q5(b) Discuss the extent to which firms in Singapore determine their price and output to maximise profits. [15]
(perfectly and imperfectly competitive firms)
Q6. Many fast food chains pride themselves in offering various menus by adopting various pricing strategies. For example, KFC offers discounts for students while McDonald’s offers 6-piece nuggets at $4.40 and 9-piece nuggets at $5.70.
(a) Explain the factors that are necessary for price discrimination to occur.
(b) Discuss whether price discrimination in the fast food industry is desirable.
(price discrimination)
Q7(a) Explain how firms can increase their market power
Q7(b) Discuss whether dominant firms are always desirable from a society’s point of view.
(Monopoly & Oligopoly)
Q8. The level of merger and acquisition activities in Asia is expected to increase substantially with economic recovery and the return of the Asian economies to their pre-financial crisis growth path.
(a) Explain why firms attempt to grow through undertaking mergers and acquisitions.
(b) Discuss whether such mergers and acquisitions are in the public interest and if there is a need for government intervention.
(Market Dominance, a form of Market Failure)
Q9. Restaurants across Singapore are engaging in differential pricing strategy. whereby weekend dinners pay more than weekday customers and special discounts are offered to both students and senior citizens alike.
(a) Explain how restaurants in Singapore discriminate buyers by charging different prices for the same meals.
(b) Discuss the extent to which barrier to entry is the most important factor influencing a firm’s behaviour in your country.
(price discrimination)
Q10. In recent years, small local firms in the retail industries in Singapore are becoming bigger and at the same time many large foreign firms have entered these industries
a) Explain the possible reasons for the above changes in the retail industries in Singapore.
b) Discuss the extent to which such changes are in the interest of consumers.
(Monopoly & Oligopoly)
Q11. Oligopoly is the best market structure that is able to achieve efficiency, equity and innovation. Discuss. [25]
(Oligopoly)
Q12(a) Explain why prices might fluctuate less in an oligopolistic market than in a perfectly competitive market. [10]
Q12(b) Discuss whether monopolistic competition is more likely to be beneficial to consumers than oligopoly.
(Monopolistic Competition & Oligopoly)
Q13. In Singapore, there are many small home interior design firms in the industry. With low startup costs, these firms, such as Meng Design, usually market themselves as providing exclusive designs or affordable services. On the other hand, in the budget airline industry. Jetstar and Tiger Airways often offer lower-priced tickets.
(a) According to economic theory, firms aim to become big to enjoy. Explain why some firms remain small in reality. (10)
(b) Discuss whether Jetstar’s and Meng Design’s strategies are due to the features of the industry they are in [15]
(Costs Theory & Firms’ Characteristics)
Q14.Globalisation increases the level of competition among firms in a country, thereby making markets more competitive resulting in increased consumer welfare.
Assess the extent to which globalisation will lead to more competitive markets and increased consumer welfare. [25]
(Firms’ Performance)
Q15. There are four players in the retail petrol industry in Singapore – Exxon Mobil (Esso), Shell, Singapore Petroleum Company and Caltex. In 2011, the Competition Commission of Singapore led an inquiry to assess whether there is collusion between competitors in the industry.
(a) Explain how the features of the retail petrol industry in Singapore affect pricing and decisions in the industry.
(b) Discuss the view that firms need to engage in collusion to increase profits.
(Oligopoly)
Q16(a) Explain how the size of firms affects the price and output decisions of various firms.
Q16(b) Discuss the extent to which large firms in an industry impede economic efficiency.
(Firms’ Performance)
Q17. Explain why the behaviour of firms differs across industries and discuss if such behaviour is desirable. [25]
(Firms’ Conduct)
Q18. AMR Corp, parent of American Airlines, bowed to pressure recently from its creditors. including its largest labour unions, and said it would explore merger options while it is still in bankruptcy. Its rival, US Airways Group Inc has been expressing major interest for a possible tie-up.
Source: www.reuters.com, May 2012
(a) Explain how, in economic theory, airline firms like AMR Corp would price its tickets. [10]
(b) Discuss if a merger between AMR Corp and US Airways Group Inc would benefit consumers more than producers. [15]
(Firms’ Performance)
Q19. Singapore Post Limited (SingPost) has been steadily expanding beyond Singapore. It will continue to diversify its business and tap the overseas markets. Its online shopping platforms, VPOST and Clout Shoppe, will accelerate its expansion in the e-commerce business.
Discuss how SingPost’s growth strategies might impact SingPost, consumers and other firms in Singapore. [25]
(Monopoly)
Q20. The UK rail industry is split into franchises, in which companies are invited to bid for the rights to operate individual rail routes for a specified time period. Train operators typically sell their tickets at a lower price if they are bought in advance on the internet, and they offer both first class and economy class tickets.
(a) Explain whether the above pricing policies could be considered to be examples of price discrimination.
(b) Discuss whether the UK government should regulate prices in the rail industry to protect society’s interests.
(price discrimination)
Q21. With the growing numbers of people connected to the internet, electronic commerce (e-commerce) is gaining rapid acceptance.
Discuss the view that with increasing development of the internet and e-commerce, monopolistic competition would gradually become the more prevalent market structure. [25]
(Monopolistic Competition)
Q22(a) Using examples, explain how a firm can enjoy economies of scale.
Q22(b) To what extent do you agree that oligopoly is the most desirable form of market structure in Singapore?
Q23 (a) With the use of examples, differentiate between the key features of the monopolistic competition and oligopoly.
Q23 (b) Discuss whether the survival of firms in these two models is solely dependent on their competitive strategies.
Q24 (a) Explain how, in economic theory, a perfectly competitive firm would determine the price that would maximize profits.
Q24 (b) Discuss whether firms set prices at profit-maximising level in reality. [15)
(Firms’ Objectives)
Q25. Profitable firms are necessary efficient firms. Examine this assertion. [25]
Q26. Pfizer’s merger with competitor Pharmacia in 2003 made it the largest pharmaceutical company amongst some ten to twelve companies. Pfizer (that give us the COVID-19 vaccine) also boasts the industry’s largest pharmaceutical Research and Development (R&D) organisation, which invests $7.6 billion in R&D on average annually.
(a) Identify the likely type of market structure Pfizer operates in, and distinguish its key features with perfect competition. [10]
(b) Examine whether having large companies, such as Pfizer, in the pharmaceutical market could beneficial to society. [15]
Q27. In 2005, London Energy invested millions of pounds in research and development (R&D) but it would take about two years before the factories are to run efficiently, and to enjoy economies of scale.
(a) Explain how London Energy’s investment affects its profits in the short run and long run. [10m)
(b) Economies of scale are said to be beneficial. This means that mergers of small firms should be encouraged. Discuss [15]
Q28. Discuss whether large firms have lower unit costs than that of small firms, and assess how the government can help smaller firms to lower their unit costs. [25]
More sample essays question list: Market Mechanism | Market Failure | Domestic Economy | External Economy | Global Economy