Ace Body Gyms is one of the UK's leading gyms and fitness centres and operates in an industry with many small firms. Competition within the industry is such that a single firm does not have market power. However, firms try to distinguish themselves by the quality of the service that they offer.

Question 5 a.

What kind of market structure is Ace Body Gyms operating within? Compare and contrast it with the three other market structures you have studied based on price, output and profit. Be sure to include graphs in your discussion. (20 marks)

b. Explain the barriers to entry that might exist in the market in which Ace Body operates. (4 marks)