Edexcel A2 Economics Unit 3 6EC03 (June 20th 2016) Exam Thread

I wrote that too, but ran out of time so had to leave it.

I said how proftis could decrease due to reduced demand, how profits could increase if their price was lower than competitors, and also said profits could raise due to collusion, but could also fall due to collusion if they were undercut

Reply 381

AJC1997

2

Original post by Vegan_

What did you write for 10a? Oligopoly? The passage kept on mentioning monopoly so I got confused... So I mentioned both lol

yeah I didn't specifically mention either, i Just said the 3-firm concentration ratio and how the market was highly concentrated with a few large firms dominating the industry

Reply 382

henrybidders

Do you guys think for the 16 marker on question 10 about why 3 firms have 85% of the market I could have talked about potential predatory pricing which may have previously forced other firms out?

Reply 383

.JC.

14

Original post by MouseyBrown

I know what you're saying, but I used cause it said they were often fifty miles apart...if one sets up fifteen miles away that gonna hurt your profits.

Fair enough. I didn't think that would really make much of a difference given the minimum distance away and the fact that there was imperfect information regarding the prices, i.e. at that point there wasn't a consideration of advertising the prices

Again, you could probably just use that as an evaluation point.

Reply 384

Mubarak9

1

Original post by MouseyBrown

I can't remember what the question was exactly, but average costs were falling, which is nothing to do with diminishing marginal returns until those diminishing returns push MC above AC.

Yh it said it hasn't reached diminishing returns yet as the answer.

Reply 385

Mollylgraham18

Original post by MouseyBrown

I can't remember what the question was exactly, but average costs were falling, which is nothing to do with diminishing marginal returns until those diminishing returns push MC above AC.

The answer was the one about diminishing marginal returns - if I remember correctly it said that diminishing marginal returns had NOT YET set in

(edited 7 years ago)

Reply 386

Jamjam701

Can anyone remember what they put for issues when regulating a merger? for question 9.

Reply 387

kieton123

1

Original post by MouseyBrown

I can't remember what the question was exactly, but average costs were falling, which is nothing to do with diminishing marginal returns until those diminishing returns push MC above AC.

Quite spot on Mousey.

Reply 388

Featheo

Original post by A-LevelEconomist

Anyone here do question 9-what did you say for the 16 marker?

KAA - Economies of scale, rationalization, monopoly power = higher profits, synergies, economies of scope.

EVAL - Diseconomies of scale, unemployment increase, monopoly power = increase price for consumers, decrease output, decrease contest-ability and competition.

Reply 389

.JC.

14

Original post by henrybidders

Do you guys think for the 16 marker on question 10 about why 3 firms have 85% of the market I could have talked about potential predatory pricing which may have previously forced other firms out?

I mentioned quite a bit:

- Economies of scale
- Pricing strategies (predatory, limit-pricing)
- Non-pricing strategies (advertising)
- Collusion
- Lack of market regulation/lack of power of regulatory authorities
- Ability to gain agreements with large franchises (e.g. KFC, Burger King, Costa, Starbucks etc.)
- High barriers to entry, start up costs, costs of building a MFO, overheads

I then evaluated most of these to some degree.

(edited 7 years ago)

Reply 390

tommyprice5

2

Original post by Jamjam701

Can anyone remember what they put for issues when regulating a merger? for question 9.

Regulatory capture, difficulty in measuring benefits of the merger (e.g. benefitting the producers of bananas, higher tax revenue etc) and inefficiencies (cost to government and time taken)

Reply 391

MouseyBrown

9

Original post by kieton123

Quite spot on Mousey.

Yeah thanks ha, I'm not going nuts am I? Diminishing returns sets in from the second MC starts going up. It's actually nothing to do with AC in that way.

Reply 392

CynicalRaven

8

Original post by A-LevelEconomist

Anyone here do question 9-what did you say for the 16 marker?

I dragged it on to be honest

KAA: job stability, higher profits, balances out monopsony power, I think I might have said something about dynamically efficient because they could invent cheaper ways of transporting banas, economies of scale. I

Eval: culture clash, attracts regulators due to prices, xinefficiency, less choice, higher prices, job cuts as firms make themselves more attractive prior to merger and as they cut overlap afterwards.

(edited 7 years ago)

Reply 393

AJC1997

2

Original post by Mollylgraham18

The answer was the one about diminishing marginal returns - if I remember correctly it said that diminishing marginal returns had NOT YET set it

I think this is one of those questions where Edexcel will accept two answers given that they are explained correctly.

I chose the other key but used the law of dimnishing returns in my answer along with a diagram showing falling AC with increasing MC beyond a certain point AC increased due to the law of diminishing returns

Reply 394

Iscodisco

11

Original post by A-LevelEconomist

I personally found question 9 so much easier ??? Like the 16 mark was benefits of mergers ..

Same question 9 was very nice indeed. Did you put an output level of 1 or 5 for the multiple chioce question? Also what benefits did you put of the merger, and what problems for the competition authorities??

Reply 395

Featheo

For question 9.A the one about monopsony power and the conditions necessary. I defined monopsony and said that purchasing power was necessary and used data from the extract to back it up. This right and how many marks can I get?

Reply 396

henrybidders

Original post by .JC.

I mentioned quite a bit:

- Economies of scale
- Pricing strategies (predatory, limit-pricing)
- Non-pricing strategies (advertising)
- Collusion
- Lack of market regulation/lack of power of regulatory authorities
- Ability to gain agreements with large franchises (e.g. KFC, Burger King, Costa, Starbucks etc.)
- High barriers to entry, start up costs, costs of building a MFO, overheads

I then evaluated most of these to some degree.

Yeah i used some of them, I went for predatory, advertising/loyalty, low profitability (mentioned in an extract) and high sunk costs.

Reply 397

A-LevelEconomist

2

Original post by Featheo

KAA - Economies of scale, rationalization, monopoly power = higher profits, synergies, economies of scope.

EVAL - Diseconomies of scale, unemployment increase, monopoly power = increase price for consumers, decrease output, decrease contest-ability and competition.

Yes I put that and also mentioned access to markets and they may colle with another distributing firm which will attract attention from the authorities??

Hopefully I put enough for 14 marks...

Reply 398

A-LevelEconomist

2

Original post by Featheo

For question 9.A the one about monopsony power and the conditions necessary. I defined monopsony and said that purchasing power was necessary and used data from the extract to back it up. This right and how many marks can I get?