Six Market Structures to Revise for Exams (2025 Focus)

Here is a quick video short on some interesting and relevant market structures to revise ahead of the 2025 papers. Having some more in-depth context can be a really productive way to impress the examiners as well as using the data and evidence contained in paper extracts!

1. Water Industry – Natural Monopoly

• Core Concept: Natural monopoly due to high fixed costs and infrastructure barriers.
• Key Issues:
  • Regulatory failures can lead to inefficiency or consumer harm.
  • Ongoing debate around nationalisation due to rising bills and poor service quality.
• Evaluation Point: Consider whether private or public ownership best delivers efficiency and equity​.

2. Energy Supply – Contestable Oligopoly

• Market Shift: Rise of challenger firms like Octopus Energy shaking up traditional dominance.
• Key Themes:
  • Increasing contestability due to lower barriers to entry.
  • Policy focus on renewables and sustainable supply.
• Exam Tip: Explore oligopoly features with renewable energy policy as real-world context​.

3. Banking – Impact of Challenger Banks

• New Players: Firms like Monzo and Revolut disrupting the market.
• Consumer Impact:
  • Greater innovation and customer service improvements.
• Regulatory Angle:
  • Banking regulation balances risk management with encouraging competition​.

4. Low-Cost Gyms – Economies of Scale

• Trends:
  • Growth in low-cost gyms due to changing consumer preferences.
  • Competition from home fitness equipment intensifying post-pandemic.
• Key Focus:
  • Analysis of cost structures, profit margins, and scalability.
• Useful Concept: Link to productive efficiency and dynamic efficiency​.

5. UK Car Industry – Structural Decline

• Challenges:
  • Declining output and employment.
  • Struggles to transition effectively to electric vehicles (EVs).
• Implications:
  • Highlights structural unemployment and the need for industrial policy intervention​.

6. Telecoms – Price Discrimination & Mergers

• Market Dynamics:
  • Example: BT/EE merger – illustrates horizontal integration.
• Strategies:
  • Use of price discrimination such as social tariffs to address affordability.
• Efficiency Angles:
  • Evaluate types: allocative, productive, dynamic, and X-inefficiency​.

📌 Overall Themes

• Real-world industries illustrate textbook concepts (monopoly, oligopoly, contestability).
• Focus on regulatory responses, firm behaviour, and consumer outcomes.
• Strong emphasis on using current data and policy developments in exam responses.