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Consumer Benefits in a Competitive Market

Discuss whether or not consumers benefit from a competitive market.

Category:

Market Structures and Competition

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Answer

1. Understand the definition of a competitive market and its importance in the economy.
2. Consider both the potential benefits and drawbacks of a competitive market for consumers, including lower prices, higher quality, increased choice, wasteful duplication, and cost-cutting measures.
3. Evaluate the balance between competition and regulation to ensure that consumers receive the maximum benefits of a competitive market.

STEPS TO WRITE ESSAY 💡MAIN POINTS💡OVERVIEW
I. Introduction
A. Definition of a competitive market
B. Importance of discussing whether or not consumers benefit from a competitive market
C. Thesis statement

II. Why consumers might benefit from a competitive market
A. Consumers have some power
B. Lower prices
C. Higher quality
D. Increased choice
E. Goods and services readily available

III. Why consumers might not benefit from a competitive market
A. Firms may be too small to take advantage of economies of scale
B. Firms may not have much profit to invest in research and development
C. Wasteful duplication
D. Wasteful expenditure on advertising
E. Reduction in quality because of cost-cutting
F. Too much choice, taking time to make decisions
G. Consumers may benefit more from monopoly where economies of scale result in lower prices than in a competitive market

IV. Conclusion
A. Restate thesis statement
B. Summarize main points
C. Final thoughts on whether or not consumers benefit from a competitive market.

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I. Introduction

A. Definition of a competitive market
A competitive market is a market in which a large number of buyers and sellers compete to set prices and offer products and services.

B. Importance of discussing whether or not consumers benefit from a competitive market
It is important to discuss whether or not consumers benefit from a competitive market as consumers are the key players in the market and their satisfaction is crucial for the success of any business.

C. Thesis statement
Consumers may or may not benefit from a competitive market depending on various factors.

II. Why consumers might benefit from a competitive market

➡️A. Consumers have some power
In a competitive market, consumers have the power to choose from a variety of products and services, and can influence prices based on their purchasing decisions.

➡️B. Lower prices
Competition between firms in a market leads to lower prices for consumers, as firms try to offer the best prices to attract customers.

➡️C. Higher quality
Firms in a competitive market strive to offer high-quality products and services to gain a competitive advantage over their rivals, which benefits consumers.

➡️D. Increased choice
A competitive market offers consumers a wide variety of choices, which allows them to pick products and services that suit their needs and preferences.

➡️E. Goods and services readily available
In a competitive market, goods and services are readily available as firms try to meet the demands of consumers.

III. Why consumers might not benefit from a competitive market
➡️A. Firms may be too small to take advantage of economies of scale
Small firms in a competitive market may not be able to take advantage of economies of scale, which may result in higher prices for consumers.

➡️B. Firms may not have much profit to invest in research and development
In a competitive market, firms may not have enough profits to invest in research and development, which may affect the quality of their products and services.

➡️C. Wasteful duplication
In a competitive market, firms may engage in wasteful duplication of resources, such as advertising and marketing, which can increase costs for consumers.

➡️D. Wasteful expenditure on advertising
In a competitive market, firms may engage in wasteful expenditure on advertising, which may increase the prices of their products and services, thereby reducing the benefit for consumers.

➡️E. Reduction in quality because of cost-cutting
Firms in a competitive market may resort to cost-cutting measures, such as reducing the quality of their products and services, to offer lower prices to consumers.

➡️F. Too much choice, taking time to make decisions
An excessive number of choices in a competitive market may make it difficult for consumers to make decisions, which may reduce the benefits of the market for them.

➡️G. Consumers may benefit more from monopoly where economies of scale result in lower prices than in a competitive market
In some cases, consumers may benefit more from a monopoly than a competitive market, as a monopoly may be able to take advantage of economies of scale to offer lower prices to consumers.

IV. Conclusion

A. Restate thesis statement
In conclusion, the benefits of a competitive market for consumers depend on various factors.

B. Summarize main points
Consumers may benefit from lower prices, higher quality, increased choice, and readily available goods and services in a competitive market. However, some factors such as wasteful duplication, cost-cutting measures, and an excessive number of choices may reduce the benefits for consumers.

C. Final thoughts on whether or not consumers benefit from a competitive market.
While a competitive market can be beneficial for consumers in certain cases, it is important to strike a balance between competition and regulation to ensure that consumers receive the maximum benefits of a competitive market.

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