AQA A2 Economics Unit 3 (ECON3) 20th June 2016 OFFICIAL THREAD

firstly PD can be done because of differing elasticities of demand - lunch time = inelastic (fewer alternatives etc) and afternoon is elastic (more time etc)

The coffee shop will make more revenue by price discriminating because the inelastic demand will see an increase in revenue which makes up for not making as much in say the afternoon when demand is elastic (the idea that they could potentially make a loss without the lunchtime surplus is the influence of the pricing strategy)

in terms of costs, price discrimination allows a firm to spread costs more evenly among consumers because output would be higher and less waste is produced e.g. they would have to chuck away coffee if elastic group were charged high prices because they have no reason to pay (alternatives etc)

hope that helps!

Why do people want cost benefit analysis to come up? There is nothing to even say about it.

At least it's an afternoon exam :/

really i thought it was at 8am

yeah the first bit makes sense ubt the mark sceheme used an example of workers:
The café has large fixed costs, eg staff (1 mark) and therefore there are times of day when it works to full capacity (1 mark) and others where it is under capacity (1 mark). It therefore needs to spread costs more evenly (1 mark) and then if it can maximise TR (1 mark) it will also maximise profit (1 mark). Revenue is increased by increasing price when p.e.d is inelastic (1 mark) and reducing price when demand is elastic (1 mark). In some ways this is a similar pricing strategy to that of the low cost airlines (1 mark).
- but what has the fixed costs to do with the capacity? :/

it mentions capacity as in utilising the coffee shop - how many people using the coffee shop

so like at lunch time a cafe might have all the tables filled and being used

after lunch and mid morning they may have spare tables - wasted resources and not being used to capacity

(i think)

i genuinely hate the 10/15 mark questions i feel like you need more common sense than actual economic knowledge it makes me so angry (i'm not saying you don't have it by the way) hahah it's just confusing

oooh okay, thank you so much >.< , i basically don't have common sense though to be honest hahaha, yeah my teacher said it's about 'logical chains of reasoning' so you just have to break everything down step by step which is annoying! I totally forgot about 10/15markers and have just been loooking at 25marks until now . How are you revising for it?

Yeah I guess that correct, my chains never seem to be logical haha woops.
For 25 markers you just gotta learn evaluative points for basically EVERYTHING and just reading thought the mark schemes now at answers, too late to be attempting them now I guess plus they're impossible to mark

For the 15/10 marker's I am just trying to learn all the tiny and complex details of the topics because they seem to ask such niche things but I have no idea how else to do it unless you have any tips ?

Evaluate the view that competition policy is never necessary because, in the long run,market forces will ensure that monopolies cannot abuse their power and will not last.

how can market forces stop monopolies abusing their power though?

loool honestly, i'm just trying to cram right now, I got a C last year, resitting this year and have been trying to aim for 100% buti'm literally praying for God's favour on these economics exams

Read about 'creative destruction'

Hey does that mean you resitting ECON3 and ECON4?

what's/where's that from?