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What does this mark scheme mean?

20160925_132611.jpg

For (b).
Mark scheme for
2 marks: explanation of possible economics/diseconomies
4 marks: development with explicit indetification of chabge of scale/appropriate explanation/long run change

How would i go about answering to get the 4 marks? I dont unserstand what the mark scheme is saying
Reply 1
Original post by valbrechts
20160925_132611.jpg

For (b).
Mark scheme for
2 marks: explanation of possible economics/diseconomies
4 marks: development with explicit indetification of chabge of scale/appropriate explanation/long run change

How would i go about answering to get the 4 marks? I dont unserstand what the mark scheme is saying


I believe it may be referring to returns to scale?

What exam board are you?
Also i assume you're A2 Econ?
Reply 2
Original post by kas9
I believe it may be referring to returns to scale?

What exam board are you?
Also i assume you're A2 Econ?


A2 yeah. WJEC
My teacher has never mentioned the term 'returns to scale' so idk if I have to know it. Havent seen it on the new spec
Reply 3
Original post by valbrechts
A2 yeah. WJEC
My teacher has never mentioned the term 'returns to scale' so idk if I have to know it. Havent seen it on the new spec


I'm doing A2 AQA.
Sorry then, not sure what it's referring to.
I teach WJEC and although the specification does not state the requirement to know about increasing, constant and decreasing returns to scale this would be expected at A level. For four marks you are expected to discuss how as the firm grows in the long run, it at first experiences increasing returns to scale between Q1 and Q3. This is because as it grows cost per unit falls and so it is able to produce more output per unit of input. At point Q3 the firm reaches the minimum efficient scale which is where cost per unit of output is at its lowest. Beyond Q3 decreasing returns to scale set in as cost per unit rises and the firms output per unit of input falls.
Hope this helps
Reply 5
Original post by mapotts53
I teach WJEC and although the specification does not state the requirement to know about increasing, constant and decreasing returns to scale this would be expected at A level. For four marks you are expected to discuss how as the firm grows in the long run, it at first experiences increasing returns to scale between Q1 and Q3. This is because as it grows cost per unit falls and so it is able to produce more output per unit of input. At point Q3 the firm reaches the minimum efficient scale which is where cost per unit of output is at its lowest. Beyond Q3 decreasing returns to scale set in as cost per unit rises and the firms output per unit of input falls.
Hope this helps


Thanks a lot!
We did learn about economies/diseconomies of scale. Would EoS be the same as Increasing returns to scale, and DEoS the same as Decreasing returns to scale?
Yes indeed
Reply 7
Original post by mapotts53
Yes indeed


Ahhh okay. Makes sense. Thank you!!

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