A2 Edexcel Unit 3 12th June 2012 Megathread

For 2 I got decrease in output and price. The output decreases for an individual firm or was it talking about the whole industry?

Also for question 10b I only shifted AC not AC AND MC. Would I get marked down?

Thanks

Well you would only shift ac and mc if there was a change in variable cost e.g. reduction of 40% of ford staff! I talked about reduction in staff and reduction in outlets (rent cost), then realised i had only shown fall in ac so crossed out the reduction in staff and just used a reduction in outlets as thats a fixed cost and only shifts ac and not mc-so hopefully im right :/!

Reply 181

alicatee

Original post by chingchong

Well you would only shift ac and mc if there was a change in variable cost e.g. reduction of 40% of ford staff! I talked about reduction in staff and reduction in outlets (rent cost), then realised i had only shown fall in ac so crossed out the reduction in staff and just used a reduction in outlets as thats a fixed cost and only shifts ac and not mc-so hopefully im right :/!

I did only AC, but in my evaluation I said that I had assumed that labour was a fixed cost (ie: a yearly contract). However, they would most likely be a variable cost (ie: paid hourly) so I would expect profits to increase by less. Hopefully I can still get full marks only shifting AC!

Reply 182

unoh

7

Original post by alicatee

I did only AC, but in my evaluation I said that I had assumed that labour was a fixed cost (ie: a yearly contract). However, they would most likely be a variable cost (ie: paid hourly) so I would expect profits to increase by less. Hopefully I can still get full marks only shifting AC!

there was a subsidy provided? i reduced ac

Reply 183

chingchong

Original post by alicatee

I did only AC, but in my evaluation I said that I had assumed that labour was a fixed cost (ie: a yearly contract). However, they would most likely be a variable cost (ie: paid hourly) so I would expect profits to increase by less. Hopefully I can still get full marks only shifting AC!

Thats well explained actually so im pretty sure we will get full marks :biggrin:

! Just hope grade boundaries are low :P

And does anyone knw for 10 D culd i still get full marks for putting only non price strats? I used info from extract for everyone one!

Reply 184

student1231

Question 2 - Fall in BOTH output and price. I think the question was talking about the firm and not the industry.

Question 4 - I put rising AC? Is this correct?

Question 5 - How did everyone get 2-3? I took a guess at it. Some of my other friends put 4-5. Is anyone 100% sure of the answer to this?

Reply 185

alicatee

Original post by chingchong

Thats well explained actually so im pretty sure we will get full marks :biggrin:

! Just hope grade boundaries are low :P

And does anyone knw for 10 D culd i still get full marks for putting only non price strats? I used info from extract for everyone one!

This mark scheme says you can only get a maximum of 6/8 for the KAA bit. (check the very last question). But I'm not sure if they mean refering to only one strategy ie: advertising ... or only talking about non-pricing strategies.

http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/January%202011%20-%20MS/6EC03_01_rms_20110309.pdf

Reply 186

unoh

7

Original post by alicatee

This mark scheme says you can only get a maximum of 6/8 for the KAA bit. (check the very last question). But I'm not sure if they mean refering to only one strategy ie: advertising ... or only talking about non-pricing strategies.

http://www.edexcel.com/migrationdocuments/QP%20GCE%20Curriculum%202000/January%202011%20-%20MS/6EC03_01_rms_20110309.pdf

2012 jan mark scheme says award generously for game theory too

Reply 187

alicatee

Original post by student1231

Question 2 - Fall in BOTH output and price. I think the question was talking about the firm and not the industry.

Question 4 - I put rising AC? Is this correct?

Question 5 - How did everyone get 2-3? I took a guess at it. Some of my other friends put 4-5. Is anyone 100% sure of the answer to this?

2.) Pheww
3.) Yes, I'm almost 100% sure because MC=MR from 2-3... I think they were both 6 (or 8 can't remember)
4.) No it was the one to do with dimishing returns- A. AC falls after X and when it intersects MC it starts to rise again.

Don't worry though you can still get 2 marks for what you wrote/knocking out other answers!

I mean * 4.) 5.)

For 10 b- why they have turned losses into profits, did anyone put the banks were now more willing to lend ( mentioned in the extract) and that consumer confidence in US increased slightly by the end of 2010(own knowledge) so demand increased?

Reply 190

XO*

1

Updated::

In blue is what I put, so if you disagree let me know.
In red is possible other answers you can put from what people have generally been writing.

1. Horizontal integration
2. I got decrease in price and decrease in output (as it was about 1 firm, not the industry)
3. Vertical integration acts as a barrier to entry.
4. That increasing section of MC I put falling AVC? Got that wrong, my teacher said it was diminishing marginal rate?
5. Profit maximising table. Did output 2-3
6. Was this about predatory behavior? I put price set below AVC
7. Question about Cartels was the short term profit for an individual.
8. Question about PFI was that public sector could not raise initial funds (perhaps due to fiscal defecit).

Not sure if they are in the right order.

Question 10 Data Response:

a) Market structure: Oligopoly - mentioned characteristics and proof from the extract.

b) Why they have turned losses to profits - talked about falling costs, drew a fall in AC and MC and mentioned reasons from the extract

Here you could also talk about increase in AR/MR due to increased sales and so on..

c) How contestable was the market:
Definition and Characteristics.
It was contestable because:
- Evidence of new entrants
- Changing trends e.g. for less gas guzzlers and more mid-range cars
- Linked with vacant niches
Wrote a couple more things that I have forgot.

Was not contestable because:
-Toyota had most efficient manufacturing - linked to economics of scale
-Mentioned managerial economics of scale because extract mentioned strong management
-Significant sunk costs - e.g. Marketing/Advertising with examples
Forgot my other points...

d)Pricing/Non-pricing strategies to increase revenue.

Pricing:
-Limit pricing
-Predatory pricing
-Sales maximisation
-Cost Plus pricing
-Profit Maximisation

Non-pricing:
-Advertising + Marketing
- Celebrity Endorsement
- Merger/Integration
- Special discounts.
- Collusion - Game Theory Analysis
For this I also evaluated pricing strategies with the kinked demand.

(edited 11 years ago)

Reply 191

Whitey04

for the 4th MCQ i got an output of 4-5?

Reply 192

XO*

1

Original post by Whitey04

for the 4th MCQ i got an output of 4-5?

That is wrong. Profit Maximisiers (MC=MR) output where Marginal Profit = 0.
At output 2-3. MC = 6 and MR = 6.

MR-MC=MP.
Therefore 6-6=0

Original post by Whitechapel

What do you mean a 'decrease in price increase and decrease in output'?

Wouldn't they both just decrease?

Yeah you are right both decrease, typo :P

Reply 195

Whitechapel

11

Original post by XO*

Yeah you are right both decrease, typo :P

Oh right I was just making sure haha I thought it was a typo. Did you draw the diagram for that? I don't remember if I did, I hope so though haha.

Edit* I do remember, yes I did haha

Reply 196

XO*

1

Original post by Whitechapel

Oh right I was just making sure haha I thought it was a typo. Did you draw the diagram for that? I don't remember if I did, I hope so though haha.

Edit* I do remember, yes I did haha

Good good, yeah I drew supply increasing on the demand and supply diagram, then drew a fall in MR=AR=D to normal profits.

Reply 197

ms93

Original post by tizza1394

What did you put? I put AC is rising but didn't really know :/

Yeah apparently that was the answer and I didn't put that :frown:

EDIT: Oh, I put the diminishing returns one and a lot of people on this thread have said that! But every other person in my school that does economics did the AC rising one so I assumed I was wrong, not sure though!

(edited 11 years ago)

Reply 198

ms93

Uh oh, I got 5/8 for the multiple choice, never done that badly in past papers before, this multiple choice section was a nightmare :|

Reply 199

alicatee

What did people write for 10c, the one about contestability. I think I wrote:
Definition and characteristics
1)For why it is contestable:
-businesses lending more readily- therefore easier to finance the costs necesary to start up
- New and upcoming cars that use less energy
-i can't remember my last point but i wrote 3

2.) Not contestable:
-High capital costs in setting up
-Other large companies have driven down AC, therefre unprofitable to enter the market.
-Requires expertise
-Volkswagon spent 3 billion on marketing represeting a high sunk cost.

What did you put?!

A2 Edexcel Unit 3 12th June 2012 Megathread

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