Market structures

Explain how the data in Extract D (Figure 4) show that the supermarket sector is competitive.

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.

Explain how the data in Extract A (Figure 2) show that greater competition leads to lower prices in the market for generic drugs.

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.

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.