Paper 2 · June 2009 · Market Structures
The Bulawayo Public Transport Association is made up of a small number of commuter omnibus operators who coordinate to charge similar fares along shared routes, resembling a cartel arrangement. This is most consistent with which market structure?
AMonopolistic competition, since operators offer slightly differentiated services.
BOligopoly, since a few large operators coordinate pricing through an association.
CMonopoly, since a single operator controls the entire route network.
DPerfect competition, since there are many independent small operators.
Explanation
A small number of interdependent firms coordinating fares through a common association is characteristic of oligopoly, where a few dominant firms can act together on price. This differs from perfect competition (many price-taking firms with no coordination), monopolistic competition (differentiated products, no collusive pricing) and monopoly (a single seller, so no need to coordinate with rivals).
Derived from ZIMSEC Economics Paper 2, June 2009, Section B Q1