15 marks
Case study · Digital markets
Discuss the likely benefits of mergers for firms such as Microsoft.
Specification point 3.3.3 · Theme 3
Economies and diseconomies of scale
Revenues, costs and profits · Business behaviour and the labour market
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5 questions
Essay questions
Long-form evaluation and discussion
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Data-response questions
Questions built around exam extracts
10 marks
Case study · The electronics industry
Assess whether firms in the electronics industry benefit from economies of scale.
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Short-answer questions
Focused calculations, explanations and diagrams
2 marks
ContextThe makers of Fiat cars merged with the makers of Vauxhall cars in 2021. Fiat management had aggressively sought a merger to achieve economies of scale. The competition authorities in the EU investigated the merger.
Explain one type of internal economies of scale that the newly merged car company may achieve.
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2 marks
ContextThe following illustrates the daily average cost curve for a doughnut producer: Costs (£) Average Cost 0 Z Output …
Explain what happens to total cost at output levels greater than Z.
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Multiple-choice questions
Quick checks of economic understanding
A-level Paper 1, November 2020, Q5(c)Multiple choice
1 mark
Context‘Bettys’ is a luxury café, first opened in Harrogate in 1919 specialising in afternoon tea service. Since then it has opened a further five branches in Yorkshire. It has no plans to increase the number of cafés. The six branches have 2 million customers a year.
Assume ‘Bettys’ merges with a major tea leaf supplier. Which one of the following is most likely to be an advantage as a result of this merger?
AExternal economies of scale will increase efficiency
BGreater control to lower prices of tea
CIndustrial diversification increases risks
DLower monopoly power in the café market
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