A Level Economics AQA Practice Exam

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Prepare for the A Level Economics AQA Exam with rigorous quizzes and essential study materials. Test your understanding with multiple choice questions, detailed explanations, and targeted hints. Boost your confidence to excel in your Economics exam!

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What typically happens to a company's market share when it pursues a growth objective?

The market share decreases
The market share remains unchanged
The market share expands
The market share becomes irrelevant

The correct answer is: The market share expands

When a company pursues a growth objective, it typically aims to increase its sales volume, widen its customer base, and improve its overall competitive position within the market. Such strategies may include expanding product lines, entering new markets, enhancing marketing efforts, or reducing prices to attract more customers. As a result of these activities, a company's market share—the percentage of the total market that the company controls—tends to expand. By successfully growing the business, the company not only increases its sales but also potentially takes customers away from competitors, which further contributes to an increase in market share. Growth can also lead to economies of scale, enhancing efficiency and profitability, ultimately solidifying the company’s position in the market. These effects combined create a scenario where pursuing growth objectives is strongly associated with an expanded market share.