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    how much would you have to write about for a leisure industry and the type of market it's related to? For instance, a cinema industry etc. How would you relate it to an oligopoly etc? Is it just a couple factual points of how it's an oligopoly market and rest of the marks of the essay comes from it's graphs, definitions, advantages and disadvantages, solution and evaluation?
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    (Original post by Nash96)
    As they cannot exploit economies of scale then wouldn't their costs be higher than they could possibly be so they would not be achieving productive efficiency?

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    right, originally i agreed with you, however ive just seen a markscheme for the January 2010 paper where one of the questions was to state two characteristics of a contestable market, and "productive efficiency" was a possible answer, so i think productive efficiency is a feature of a contestable market.
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    (Original post by Fas)
    right, originally i agreed with you, however ive just seen a markscheme for the January 2010 paper where one of the questions was to state two characteristics of a contestable market, and "productive efficiency" was a possible answer, so i think productive efficiency is a feature of a contestable market.
    Ah right ok maybe I've just got the wrong idea about what productive efficiency can mean! Must mean just producing using the least possible amount if resources for the firm at any particular time - I suppose economies of scale are actually a long-run thing so that would make sense. Thanks!
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    (Original post by Fas)
    right, originally i agreed with you, however ive just seen a markscheme for the January 2010 paper where one of the questions was to state two characteristics of a contestable market, and "productive efficiency" was a possible answer, so i think productive efficiency is a feature of a contestable market.
    Ah got it! Productive efficiency is possible however its unlikely as for it to occur the AR curve must meet the AC/MC at the same point. Allocative efficiency depends on the nature of the demand curve.
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    For Monopolistic competition it is essential to distinguish Long Run from Short Run...

    Remember this everyone!
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    For the kinked demand curve, what are the axis labelled?
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    Does anyone have any revision notes on either holidays and leisure travel or spectator sports for the leisure industry? I covered cinema admissions and am finding it quite limiting
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    (Original post by ThePrawn)
    For the kinked demand curve, what are the axis labelled?
    Price (of goods) and output
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    (Original post by Kuchkuchhotahai)
    For Monopolistic competition it is essential to distinguish Long Run from Short Run...

    Remember this everyone!
    so how would you distinguish them
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    (Original post by Mrgp)
    so how would you distinguish them
    The main distinguishing point is profits. In the short-run, firms in a monopolistic ally competitive market will be able to generate supernormal profit (as in the short-run they will be able to raise price above marginal cost, and hence have AR > AC ) whilst in the long run, entry into the market is significantly easier (no barriers to entry) thus only normal profit can be made
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    (Original post by Mrgp)
    so how would you distinguish them
    In the short run, monopolistically competitive firms can make abnormal profits due to product differentiation. You could use a diagram showing a firm producing at profit maximising point to help illustrate output, price and inefficiencies.
    In the long term, they make normal profits as any abnormal profit would be taken by new firms entering the industry or incumbent firms. It shifts AR (demand) to the left, and they'll be producing where AR=AC.
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    "Discuss the extent to which firms in the leisure industry are always seeking to maximise profit" how would we go about answering this? I feel like you'd need a lot of contextual information which I don't have :/
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    (Original post by Fas)
    err for the price elasticity of demand for labour :

    PED for the product - if the demand for the firms' products is highly inelastic, then if there is an increase in the wage rate of workers, firms will easily just be able to increase prices of their products without incurring a fall in demand for their product (because its inelastic) hence their demand for labour will not fall, thus resulting in an inelastic demand for labour. same applies if PED for their products is highly elastic.

    Ease of factor substitution - if firms can substitute capital for labour very easily, then a rise in the wage rate is likely to increase firms costs and impact on their profit margins, thus to retain their profit margins and not reduce their output of goods and services, firms will just substitute in extra capital (so machinery etc) for labour, hence a rise in the wage rate will cause a fall in the demand for labour, thus easy factor substitution will result in the demand for labour being elastic. Again same applies vica-versa, if firms cannot easily substitute capital for labour (so it actually costs them more) then a rise in the wage rate won't reduce demand for labour.

    Proportion of Wage Costs - if firms are quite capital-intensive anyway in their production, hence wage costs make up a very small proportion of their total costs, then a rise in the wage rate will not increase their total costs by very much thus demand for labour may not fall hence demand for labour will be price-inelastic.

    Other factors include the time period and the level of qualifications and skills, however they're fairly self-explanatory. hope that helps
    Thank you very much! That's really helped to clear it up for me.
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    Although it came up on the June 2011 paper, does anyone think that perhaps the Section A/Case study will be on the football leisure industry (i.e. with the World Cup coming up)?
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    (Original post by Kuchkuchhotahai)
    Participation ratio, Female participation ratio etc..



    Sorry I never replied in time, but what the other person said. Its useful to discuss in monopoly/oligopoly questions for evaluation purposes... I've never seen it come up in a past paper though.
    How do you calculate the participation ratio and female participation ratio? Example?
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    (Original post by Fas)
    "Discuss the extent to which firms in the leisure industry are always seeking to maximise profit" how would we go about answering this? I feel like you'd need a lot of contextual information which I don't have :/
    You basically just need to say for Level 3 that they do seek to maximise profits and then say why - reward shareholders / increase workers wages / finanace R & D etc
    Do a diagram showing the MC=MR point and another diagram showing that this point is where profit is maximised (n shaped curve)

    Then for level 4 you just need to talk about the alternative objectives of firms:
    1) market penetration
    2) Increase market share
    3) limit / predatory pricing
    4) revenue maximisation
    5) satsficing
    6)managerial objectives

    Then you could evaluate by saying depends on who the firm is controlled by - owners will want to profit maximise but managers will be more interested in other objectives
    However most of the alternative objectives are actually just clever ways of increasing profits in the long run - i.e. predatory pricing ensures no other firms join the market so abnormal profits can be made more easily in the long run
    So while a firm may not always seek to maximise profits, short term objectives may lead to it

    Done this essay and got full marks
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    (Original post by Shepherd_9)
    You basically just need to say for Level 3 that they do seek to maximise profits and then say why - reward shareholders / increase workers wages / finanace R & D etc
    Do a diagram showing the MC=MR point and another diagram showing that this point is where profit is maximised (n shaped curve)

    Then for level 4 you just need to talk about the alternative objectives of firms:
    1) market penetration
    2) Increase market share
    3) limit / predatory pricing
    4) revenue maximisation
    5) satsficing
    6)managerial objectives

    Then you could evaluate by saying depends on who the firm is controlled by - owners will want to profit maximise but managers will be more interested in other objectives
    However most of the alternative objectives are actually just clever ways of increasing profits in the long run - i.e. predatory pricing ensures no other firms join the market so abnormal profits can be made more easily in the long run
    So while a firm may not always seek to maximise profits, short term objectives may lead to it

    Done this essay and got full marks
    Couldn't have put it better, although the "n" shaped diagram is a slight extra.. But thanks anyway.
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    (Original post by dowen123)
    How do you calculate the participation ratio and female participation ratio? Example?
    I'm leaving the calculations till tomorrow evening (last minute bit of cramming) Although I'll try get back to you today with all the relevant calculations needed..
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    (Original post by Kuchkuchhotahai)
    Couldn't have put it better, although the "n" shaped diagram is a slight extra.. But thanks anyway.
    yeah, what is that 'n' shaped diagram?
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    (Original post by Shepherd_9)
    You basically just need to say for Level 3 that they do seek to maximise profits and then say why - reward shareholders / increase workers wages / finanace R & D etc
    Do a diagram showing the MC=MR point and another diagram showing that this point is where profit is maximised (n shaped curve)

    Then for level 4 you just need to talk about the alternative objectives of firms:
    1) market penetration
    2) Increase market share
    3) limit / predatory pricing
    4) revenue maximisation
    5) satsficing
    6)managerial objectives

    Then you could evaluate by saying depends on who the firm is controlled by - owners will want to profit maximise but managers will be more interested in other objectives
    However most of the alternative objectives are actually just clever ways of increasing profits in the long run - i.e. predatory pricing ensures no other firms join the market so abnormal profits can be made more easily in the long run
    So while a firm may not always seek to maximise profits, short term objectives may lead to it

    Done this essay and got full marks
    thanks a lot, that was very helpful!

    although, what is that 'n' shaped curve thing?
 
 
 

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