How is this module assessed in OCR Economics?

This microeconomic content is examined mainly in Component 1 (Microeconomics, H460/01), an 80-mark, 2-hour paper worth 33.33 per cent of the A-level, using Section A data-response questions and a Section B extended-response essay of up to 25 marks. Cost, revenue and market-structure diagrams and the evaluation of monopoly power and the minimum wage are heavily rewarded, and the ideas reappear synoptically in Component 3.

Why is market structure so important in this module?

Market structure determines price, output and efficiency. Moving from perfect competition to monopoly, firms gain price-setting power and can earn persistent supernormal profit, with monopoly criticised for allocative inefficiency where price exceeds marginal cost. The same MC equals MR logic runs through every structure, so mastering it lets you analyse perfect competition, monopolistic competition, oligopoly, monopoly and contestable markets consistently.

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Business economics and competition - OCR A-Level Economics (H460) overview

Q: What does the business-economics-and-competition module of OCR Economics cover?

It covers how firms behave and how competition shapes outcomes. The content is business objectives (profit, revenue and sales maximisation, growth, satisficing and CSR) and the principal-agent problem, costs, revenues and profit (including the law of diminishing returns and economies of scale), the four market structures (perfect competition, monopolistic competition, oligopoly and monopoly) and contestable markets, and the labour market including monopsony, trade unions and the minimum wage.

An overview of the business-economics-and-competition module of OCR A-Level Economics (H460), covering business objectives, costs, revenues and profit, the four market structures, monopoly and price discrimination, and the labour market, and how the module is examined.

Generated by Claude Opus 4.89 min readH460Updated 2026-06-02

Reviewed by: AI editorial process; not yet individually human-reviewed

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The dot points in this module
How this module is examined
How to study this module
Work through the dot points
For the official specification

The business-economics-and-competition module of OCR A-Level Economics (specification H460) explains how firms set price and output and how the degree of competition affects efficiency and welfare. It applies the cost and revenue toolkit to every market structure. This page maps the dot points and how they are examined.

The dot points in this module

Business objectives and the principal-agent problem: Profit maximisation at marginal cost equals marginal revenue, revenue and sales maximisation, growth, satisficing and corporate social responsibility, and the principal-agent problem from the divorce of ownership and control.
Costs, revenues and profit: Fixed and variable costs, marginal, average and total cost, the law of diminishing returns, economies and diseconomies of scale, the revenue concepts, and normal versus supernormal profit.
Market structures and competition: The spectrum of competition, the assumptions and short-run and long-run outcomes of perfect competition, barriers to entry and exit, and the theory of contestable markets.
Monopoly, oligopoly and monopolistic competition: Monopolistic competition, oligopoly and interdependence (collusion, price wars and non-price competition), monopoly and price discrimination, and the costs and benefits of monopoly power.
The labour market and wage determination: The derived demand for and supply of labour, wage determination in competitive markets, monopsony, trade unions, and the effect of a national minimum wage.

How this module is examined

OCR Economics is a two-year linear course with three papers at the end. This module is examined mainly in Component 1 (Microeconomics), an 80-mark, 2-hour paper using data-response questions and a chosen extended-response essay of up to 25 marks. The content also appears synoptically in Component 3 (Themes in economics). Higher-mark questions are marked by levels of response, rewarding accurate cost, revenue and market-structure diagrams and balanced evaluation.

How to study this module

Master the diagrams. Cost and revenue curves and the four market-structure diagrams recur constantly; practise the monopoly and perfect-competition diagrams until automatic.
Practise the calculations. Find profit-maximising output ( $MC = MR$ ), average and marginal cost, and the competitive wage.
Build evaluation lines. Weigh the costs of monopoly power against economies of scale and dynamic efficiency, and check market structure before judging the minimum wage.
Use real examples. Natural monopolies, the supermarket oligopoly and the National Living Wage make application marks easy.

Work through the dot points

Each dot point has its own focused answer page with worked exam questions and cross-links: business objectives and the principal-agent problem; costs, revenues and profit; market structures and competition; monopoly, oligopoly and monopolistic competition; and the labour market and wage determination.

For the official specification

OCR publishes the full specification (H460), past papers and mark schemes at ocr.org.uk. Always revise from the current specification and OCR's own past papers, because the question style and the levels-of-response mark schemes are board-specific.

Sources & how we know this

OCR A Level Economics (H460) Specification — OCR (2023)