Exam questions (Jan 2006)

1. (a) Explain why the level of profit differs between perfect competition and monopoly. [10]
In a transport market of your choice, discuss the way in which its market structure affects the ability of firms to set prices and to make profits. [15]

2. Explain the factors that have influenced recent trends in the demand of
road transport. [10]
Discuss the extent to which road user charging can correct the market failure associated with the growth in road transport. [15]

3. (a) With the aid of a diagram, explain the effect of a fall in the level of
subsidies for local bus services. [10]
Discuss whether subsidies alone are a sufficient policy to halt the decline in the demand for local bus services. [15]

Answers/Marking guidelines here

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