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

What data response did everyone do out of interest?

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!

HEEYYYY
How'd you find it I did 9 wbu?

You're mistaken it's the other way round. You get capped 2 at A2 there's no cap at AS.

Did you guys also all get forward vertical? I thought it was a milk supplier merging with milk seller so forward:/ but everyone had backward.

what did anyone write for question 9c the 12 marker about shutting down sales?

Oh my God you're right!

i put forwards vertical too

I'm pretty sure part D was basically about price and non price competition in relation to improving profits!

It was backwards, milk is their raw material.


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yeah but didn't it say the milk producer bought the milk seller?

What do you guys think how grade boundaries will be. 64/72=90 UMS?

I lost 4 marks at least on MCQ on the easiest question, this sucks so much :///

What do you think the grade boundaries for this exam would be like?

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!

yeah but didn't it say the milk producer bought the milk seller?

Did anyone else get B for that management MCQ? Think it was only one which was unusual but I thought it must be profit satisficing as goals other than profit in short run


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Did you guys also all get forward vertical? I thought it was a milk supplier merging with milk seller so forward:/ but everyone had backward.

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

No,it was merger between a firm making products out of milk and a firm supplying milk. So it's backward integration

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.