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Edexcel Economics and Business UNIT 4 6EB04

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Original post by ringo2810
The takeovers are wider knowledge, but the changing demand from cigarettes to e-cigs is in our pre-release, and the exam board expects us to have some wider knowledge about the tobacco industry.


so what sort of research would you suggest I do in regards to takeovers?
Original post by EmilyImpossible
so what sort of research would you suggest I do in regards to takeovers?


Which tobacco firm tookover e-cig firms, (Imperial Tobacco taking over Blu E-cig) How much the tobacco firm spent on the takeover.

This website is very useful: http://www.tobaccotactics.org/index.php/E-cigarettes
Reply 42
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almando
Come on guys, this is that easy alevel we are all taking for a certain a*, type of exams you just wing no need to revise for this one lol.
Original post by almando
Come on guys, this is that easy alevel we are all taking for a certain a*, type of exams you just wing no need to revise for this one lol.


wow you're confident. some people struggle more than others. I got an a last year but I wouldn't guarantee myself an easy a*?
Reply 44
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Dann_a
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2
Original post by EmilyImpossible
true, and what will tobacco companies do to deal with this change in demand?:smile:

Sell E-cigs............ Like I literally just said

(JIT took over E-lites like a year ago)
Reply 45
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Dann_a
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2
Original post by EmilyImpossible
so what sort of research would you suggest I do in regards to takeovers?


Sounds like you could really do with some last minute wider reading if you don't know about mergers and takeovers already.....
Hi ,

Could you possible get me the mode answer to Q1 and Q7? I have done a lot of them based on teachers predictions but I'm a bit shaky on those two - I can't open the word document you have attached on competition authorities
How many paragraphs would you do for the 20 and 30 marker and do you include an introduction for both?
Reply 48
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Dann_a
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2
Original post by Teecesay
How many paragraphs would you do for the 20 and 30 marker and do you include an introduction for both?


3 for both (more evaluation for 30m)
Intro + Conclusion for both
Original post by Dann_a
3 for both (more evaluation for 30m)
Intro + Conclusion for both


Thanks!
Reply 50
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Mark179
1
isnt 30 marks 4 points each?
For the question ' Evaluate the extent to which regulation is needed on the tobacco industry?', Can I talk about the fact that cigarettes have already been taxed very heavily. Therefore, no further regulation would be needed
Original post by daniellon
For the question ' Evaluate the extent to which regulation is needed on the tobacco industry?', Can I talk about the fact that cigarettes have already been taxed very heavily. Therefore, no further regulation would be needed


you can use that as an evaluation point :smile:
Also remember that taxation = more revenue for the gov.
If there is too much regulation barriers to entry are higher so competition reduces as small firms are driven out and new firms are less likely to enter.
Hey Tizzydag you sound smart, can you help me out and I can do you few favours? Have skype? :smile:
Original post by Emilyhill98
Hey Tizzydag you sound smart, can you help me out and I can do you few favours? Have skype? :smile:


sorry cant skype but happy to help here :smile:
Original post by Tizzydag
you can use that as an evaluation point :smile:
Also remember that taxation = more revenue for the gov.
If there is too much regulation barriers to entry are higher so competition reduces as small firms are driven out and new firms are less likely to enter.


wow thats really good analysis, i wish i was that good :wink:
Original post by divagurl98
wow thats really good analysis, i wish i was that good :wink:


dont worry you'll be fine. the key is to try and make links between everything, especially in the evaluation section.
I always find that its easier to evaluate things like
"how long something may take to come into force, like a smoking ban or new law"
"how many people does it affect, and who will it affect"
"will it reduce any market failures.
Reply 57
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N0.1D34
1
Original post by Tizzydag
you can use that as an evaluation point :smile:
Also remember that taxation = more revenue for the gov.
If there is too much regulation barriers to entry are higher so competition reduces as small firms are driven out and new firms are less likely to enter.


This can be evaluated further, especially in the 30 mark:

If the firms are being driven out, supply is decreasing and as tobacco is a demerit good, this is ultimately beneficial as it could lead to decreased consumption (lower AD - consumption = 61% of AD).
Though this could lead to anti-competitive behaviour by the larger firms i.e. higher prices - again reducing demand and consumption as it is less affordable - consumers have a lower purchasing power.
So ultimately beneficial again.

Although, my second point above could be argued the other way as well.
Original post by N0.1D34
This can be evaluated further, especially in the 30 mark:

If the firms are being driven out, supply is decreasing and as tobacco is a demerit good, this is ultimately beneficial as it could lead to decreased consumption (lower AD - consumption = 61% of AD).
Though this could lead to anti-competitive behaviour by the larger firms i.e. higher prices - again reducing demand and consumption as it is less affordable - consumers have a lower purchasing power.
So ultimately beneficial again.

Although, my second point above could be argued the other way as well.


However! Tobacco is an inelastic good due to its addictiveness. As a result, increasing prices may not necessarily have the effect of reducing consumption by much. This would further increase profit margins for firms, this can be shown by the fact that prices for cigarette packets have increased from £1.65 in 1990 to £7.98 in 2013 yet the tax incidence has stay around 77% mark. Thus monopoly power would further increase :smile:
Reply 59
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N0.1D34
1
Original post by Tizzydag
However! Tobacco is an inelastic good due to its addictiveness. As a result, increasing prices may not necessarily have the effect of reducing consumption by much. This would further increase profit margins for firms, this can be shown by the fact that prices for cigarette packets have increased from £1.65 in 1990 to £7.98 in 2013 yet the tax incidence has stay around 77% mark. Thus monopoly power would further increase :smile:


Maybe so, but consumption levels have more than halved during the same period (evidence B of pre release).
And these large firms are being forced out of countries i.e. Australia and Turkmenistan - complete ban here, reducing global power.

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