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Edexcel Economics: Unit 3 Business Economics and Economic Efficiency (June 2014) EC03 Watch

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    for the football club why wasnt it A? to increase market share
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    What did you guys doing question 9 get for the patent 8 marker?
    Benefits: -economies of scale as more incentive to invest and make higher profits through cost reductions
    -creditting new innovation acts as incentive for new firms to innovate and spend into research and development

    Evaluation.
    -could lead to x-inefficiency
    -depends on duration of patents
    -loss in consumer surplus
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    (Original post by beccajane24)
    What did everyone get for the sales maximisation multi-choice question? :confused:
    output V, i think it was B, where AC=AR
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    For the table I got output level 4 where 24(AR)=24(AC)
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    Couldn't have asked for a better exam, even though I was sleep deprived with only achieving 2 hours of sleep, still smacked it after downing a **** ton of caffeine. Here is what I can remember for MCQ answers
    Q1) Backwards vertical
    Q3) Profit satisficing (Only one that made sense really)
    The one about cherry picker was E, AR=MR
    The one about sales maximisation was 4 units
    The one about Oligopoly was I think, where firms were uncertain.
    The one about the monopoly was allocatively efficient
    Q8) A - Government won't need to immediately follow
    And last question I can't remember what it was.

    (Original post by Boy_wonder_95)
    I did question 10... the majority of people from my school did 9 as well saying it was easier
    Yeah I did 10 as well. The only dodgy thing about that question was Q1) the 4 marker. Didn't know what to include from the extract for shutdown point so I just put down random figures about fixed cost, total cost, revenue etc. Hopefully will get 2 marks I believe for definition.
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    (Original post by Dilzo999)
    Couldn't have asked for a better exam, even though I was sleep deprived with only achieving 2 hours of sleep, still smacked it after downing a **** ton of caffeine. Here is what I can remember for MCQ answers
    Q1) Backwards vertical
    Q3) Profit satisficing (Only one that made sense really)
    The one about cherry picker was E, AR=MR
    The one about sales maximisation was 4 units
    The one about Oligopoly was I think, where firms were uncertain.
    The one about the monopoly was allocatively efficient
    Q8) A - Government won't need to immediately follow
    And last question I can't remember what it was.


    Yeah I did 10 as well. The only dodgy thing about that question was Q1) the 4 marker. Didn't know what to include from the extract for shutdown point so I just put down random figures about fixed cost, total cost, revenue etc. Hopefully will get 2 marks I believe for definition.
    for the oligopoly one i put the actions of one firm affect another
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    What did people who did question 10 write about for part C (price discrimination)? That was the only part of the paper I didn't like.
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    Are we allowed to talk about the exam ?


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    (Original post by Fullycorporate)
    Yeah I did 10. Did you draw a price discrimination diagram? Also did you say internet consumers had a more inelastic demand?

    What strategies did you choose for increased profit? I did predatory pricing, collusion and improving service
    Don't you mean internet consumers have a more elastic demand? Since the online market would be more contestable since there's literally dozens of online sites which consumers can compare from to get the lowest price, whereas the extract said something about consumers purchasing at in-store retails would be the more dedicated type who would wish to try the quality of their cameras before buying it so they're more likely to pay a premium.

    I drew a diagram as well, should be 3 marks if fully labelled and accurate.
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    (Original post by TRR)
    for the oligopoly one i put the actions of one firm affect another
    Well I put letter A, not sure what it was.

    (Original post by alaynestone)
    What did people who did question 10 write about for part C (price discrimination)? That was the only part of the paper I didn't like.
    For me, I said internet could do second degree with bulk buying due to warehouse space etc. For high street, this one was tough, I just waffled on how firms like jessops can charge different prices during summer time as that's when most people go on holidays and require cameras so third degree. Not really sure, I evaluated with that people may wait for newer technology like 4k cameras instead of buying a new product. And for internet I wrote that they'd have to settle for lower profit margin. Indeed it was a tough question that one. Although they made up for it with an easy 16 marker .

    (Original post by Farringtonn)
    Are we allowed to talk about the exam ?


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    Yup, the rules have changed. Edexcel now use different papers for international students.
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    (Original post by Fullycorporate)
    Yeah I did 10. Did you draw a price discrimination diagram? Also did you say internet consumers had a more inelastic demand?

    What strategies did you choose for increased profit? I did predatory pricing, collusion and improving service
    The 12 marker was probably my weakest question.
    I didn't draw a diagram I just defined it in words.
    only made one point that arguably there are not two different consumer groups as same PED, then evaluated saying the groups may have diff PED due to some "not wanting to wait for delivery" - like I said my 12) was poor

    Strategies I used were Merging with other high street retailers, Limit pricing (setting price to average costs of online rivals) and Increasing quality of service/good by offering the camera tutorials.
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    (Original post by Dilzo999)
    Well I put letter A, not sure what it was.
    i Put A also
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    (Original post by TRR)
    i Put A also
    Yay .
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    (Original post by alaynestone)
    What did people who did question 10 write about for part C (price discrimination)? That was the only part of the paper I didn't like.
    1st point: internet customers have more elastic demand due to substitutes like amazon, i then drew third degree discrination

    Eval: they dont have price making power

    2nd point: its relatively cheap to separate the markets

    Eval: Market seepage could occur as people buy it cheaply online and then sell on the black market..?
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    FOR EVERYONE WHO DID THE Q 10 JESSOPS DATA RESPONSE TELL ME WHAT YOU THINK OF MY ANSWERS AND REPLY - I WILL PUT BRACKETS WHEN IM NOT SURE

    a) Shut down profit - AR = AVC
    explain that when AR<AVC firm will have to shutdown in short run due to loss minimisation as they cannot fully pay their AVC or make a contribution to fixed cost
    Data response "revenues were £304m when losses were made" which means that AVC was greater than £304m and Jessops "reached shutdown point in Januaary 2013"

    b) Demand decreases - AR and MR decreases due to "increase in mobile phones with camera" and "people buying online instead"
    Draw graph (HOWEVER, guys tell me if i would lose a mark if my downward shifts in AR and MR show a SMALLER SNP being made rather than a SNL - because the question did state LOSSES)

    Evaluation - price competition would ensure that firms do not make losses - lower prices more than internet
    - if Jessops costs were reduced during the time that they were making losses then the magnitude of their losses would decrease so the losses would be less significant

    (tell me what you think of my evaluation would it be 4/4?)

    c) NOT TO SURE ABOUT THIS ONE EITHER
    I defined price discr
    Then i drew a 3 panel price disc diagram
    I said that internet would be elastic demand and that high street shops would be inelastic demand thus meaning that on the internet you charge customers low and in shops charge them high - i then explain that this is because there is increased contestability on the internet becuase of greater perfect knowledge, it is easier to see how much other firms are charger thus prices have to be lower to compete

    (would this analysis get 6/6)

    For evaluation i said
    - you do not want their to be arbitrage - where people buy from elastic market and sell the good in the inelastic market to the people who will pay the high prices
    - in order to price discr, you need to have price setting power which you will only have if you have a degree of market power. thus firms in perfect competition cannot price discr. even if they have seperate markets in the internet and in the high street shops
    - i then prioritised and said that price setting power is the important factor that enables you to price discriminate because without it you cant even set the price

    (would this get 6/6)

    d) I AM SURE ABOUT MY FIRST TWO POINTS BUT NOT SURE ABOUT THE LAST 2

    - price competition (eval by saying that some people are lazy and even if price is more expensive online that some people would just rather buy online than go into store)

    - improve customer care and more friendly staff (this may increase training costs because you have to teach staff how to be friendly and approachable etc) ....is this eval OK?

    NOT SURE ABOUT THESE TWO POINTS....

    -increase in quality (expensive)
    - increase in innovation (requires patents and r + d which also adds costs)

    The reason im not sure about these two points is because it later dawned upon me that Jessops sell products produced by other people like CANON NIKON etc..... so would i be credited for these marks........... although i did just do a google search and see that Jessops do have their own branded tripods and cases etc.

    THANKS FOR HELP IN ADVANCE GUYS AND HOPE THIS HELPS GUYS
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    What the hell was that football question. I just put profit satisficing didn't understand the others. Also for the table was one of the values a decimal? I thought I did it wrong.


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    (Original post by TheHenri)
    What did you guys doing question 9 get for the patent 8 marker?
    Benefits: -economies of scale as more incentive to invest and make higher profits through cost reductions
    -creditting new innovation acts as incentive for new firms to innovate and spend into research and development

    Evaluation.
    -could lead to x-inefficiency
    -depends on duration of patents
    -loss in consumer surplus
    I put lower cost to the government and more consumer choice through innovation
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    I had 5 mins to do that question. I put profits can be invested to new investions( said something about projects in the pipeline in the passag) and also about welfare.


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    (Original post by VinceVC)
    Max mark is capped at 2 if incorrect answer


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    That's not true all of the mark schemes say you can get up to 3 marks if the answer is incorrect it's only at AS that it's capped to two!
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    (Original post by BossKay)
    FOR EVERYONE WHO DID THE Q 10 JESSOPS DATA RESPONSE TELL ME WHAT YOU THINK OF MY ANSWERS AND REPLY - I WILL PUT BRACKETS WHEN IM NOT SURE

    d) I AM SURE ABOUT MY FIRST TWO POINTS BUT NOT SURE ABOUT THE LAST 2

    - price competition (eval by saying that some people are lazy and even if price is more expensive online that some people would just rather buy online than go into store)

    - improve customer care and more friendly staff (this may increase training costs because you have to teach staff how to be friendly and approachable etc) ....is this eval OK?

    NOT SURE ABOUT THESE TWO POINTS....

    -increase in quality (expensive)
    - increase in innovation (requires patents and r + d which also adds costs)

    The reason im not sure about these two points is because it later dawned upon me that Jessops sell products produced by other people like CANON NIKON etc..... so would i be credited for these marks........... although i did just do a google search and see that Jessops do have their own branded tripods and cases etc.

    THANKS FOR HELP IN ADVANCE GUYS AND HOPE THIS HELPS GUYS
    I'm pretty sure part D was basically about price and non price competition in relation to improving profits!
 
 
 
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