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Subjects · Leaving Cert Economics

Leaving Cert Economics: Perfect competition

How often Perfect competition comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 2 of the last 5 Higher Level papers, most recently in 2023.

OL Asked on 2 of the last 5 Ordinary Level papers, most recently in 2025.

Perfect competition, Higher Level(6 marks)

Quick ones on Perfect competition.

(a)Which is a feature of perfect competition?
  1. Firms rely on brand advertising to win loyal customers
  2. Price-taking firms selling identical products
  3. High barriers to entry keep new firms out
(b)In perfect competition, the individual firm's demand curve is…
  1. Kinked at the current price
  2. Downward-sloping, with MR below AR
  3. Horizontal, where D = AR = MR
(c)In long-run equilibrium, a perfectly competitive firm earns…
  1. Normal profit only
  2. A loss
  3. Supernormal profit
Show the answers

(a) Price-taking firms selling identical products

(b) Horizontal, where D = AR = MR

(c) Normal profit only

Your turn: Higher Level questions on Perfect competition.

Higher Level

Asked on 2 of the last 5 Higher Level papers, most recently in 2023.

Every paper, year by year

YearWhere it came up
2025Not asked
2024Not asked
2023Q12
2022Q6
2021Not asked

Links open the State Examinations Commission’s paper for that year.

Ordinary Level

Asked on 2 of the last 5 Ordinary Level papers, most recently in 2025.

Every paper, year by year

YearWhere it came up
2025Q11
2024Not asked
2023Not asked
2022Not asked
2021Q12

Links open the State Examinations Commission’s paper for that year.

More Perfect competition questions

Perfect competition, 2 marks

In perfect competition, each firm is?

  1. A price maker
  2. A brand leader
  3. A price taker
Show the answer

A price taker

Each firm is tiny compared with the whole market and sells an identical product. It must accept the market price set by industry demand and supply.

Perfect competition, 3 marks

In perfect competition, the individual firm's demand curve is?

  1. Vertical at the firm's output
  2. Horizontal at the market price
  3. Downward sloping, like a monopoly's
Show the answer

Horizontal at the market price

The firm can sell any amount at the market price but nothing above it. So its demand curve is a horizontal line, and Demand = Average Revenue = Marginal Revenue.

Perfect competition, 3 marks

In the long run, a firm in perfect competition earns?

  1. Normal profit only
  2. Supernormal profit
  3. A loss
Show the answer

Normal profit only

Supernormal profit attracts new firms because entry is free. Industry supply rises and the price falls until only normal profit is left, at the lowest point of average cost.

Other Economics topics

All of Leaving Cert Economics