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WalesEconomicsQuick questions
Exploring Economic Behaviour (A2 Unit 3)
Quick questions on Government intervention in markets - WJEC A-Level Economics
3short Q&A pairs drawn directly from our worked dot-point answer. For full context and worked exam questions, read the parent dot-point page.
What is competition policy?Show answer
In the UK, the competition authority can investigate and block or modify mergers that would substantially lessen competition, fine cartels that fix prices or share markets, and act against firms that abuse a dominant position (for example predatory pricing or refusing to supply rivals). The aim is to protect consumers from higher prices, lower output and reduced choice, and to preserve the competitive pressure that drives productive, allocative and dynamic efficiency. Competition policy is the main tool against the harms of monopoly and oligopoly examined in the earlier topics.
What is q1?Show answer
State two things a competition authority can do to promote competition. [2 marks]
What is q2?Show answer
Explain why a natural monopoly is regulated rather than broken up. [3 marks]
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