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1.2.4 Business competition Competition a) Advantages and disadvantages of competition to firms, consumers and the economy, including: • efficiency • choice • quality • innovation • price. b) Advantages and disadvantages of large firms and small firms. c) Factors influencing the growth of firms: • government regulation • access to finance • economies of scale • the desire to spread risk • the desire to take over competitors. d) Reasons firms stay small: • size of market • nature of market – niche • lack of finance • aims of the entrepreneur. Monopoly e) Definition of monopoly. f) Main features of monopoly: • one business dominates the market • unique product • price-maker • barriers to entry: o legal barriers o patents o marketing budgets o technology o high start-up costs. Pearson Edexcel International GCSE in Economics – Specification Issue 2 – March 2019 © Pearson Education Limited 2019 21 Subject content What students need to learn: g) Advantages and disadvantages of monopoly: • efficiency • choice • quality • innovation • price • economies of scale. Oligopoly h) Definition of oligopoly. i) Main features of oligopoly: • few firms • large firms dominate • different products • barriers to entry • collusion • non-price competition • price competition. j) Advantages and disadvantages of oligopoly: • choice • quality • innovation • collusion and cartels fixing high prices • price wars between oligopolies.