Unit 3: Business behaviour · WEC13/01

Edexcel International A-level Unit 3, October 2020

All 8 written questions and 6 multiple choice questions from Edexcel International A-level Unit 3 (October 2020), Business behaviour. Case studies: The business behaviour of large firms. Each question shows its marks and topic, and opens the question paper and mark scheme at the right page.

Question paper Mark scheme Examiner report

Section A

Q11 mark

1 In 2018 the Competition and Markets Authority carried out an investigation into a proposed merger between two of the largest UK supermarket companies, Sainsbury's and Asda. If approved, this type of merger would be an example of

Aconglomerate integration
Bhorizontal integration
Cbackward vertical integration
Dforward vertical integration

Show the answer

The answer is B.

TopicBusiness growth, mergers and market structure

Question paper p.2 Mark scheme p.4 Open in the tool

Q21 mark

Which one of the following is true?

AAt a price of P1 the firm will shut down in the short-run
BAt a price of P2 the firm will cover fixed costs and variable costs
CAt a price of P3 the firm will shut down in the long-run
DAt a price of P4 the firm will make supernormal profits

Show the answer

The answer is D.

TopicRevenues, costs and profits

Question paper p.2 Mark scheme p.4 Examiner report p.3 Open in the tool

Q31 mark

3 Which one of the following is most likely to cause the supply of engineers to the aerospace industry to be inelastic?

AJobs in the aerospace industry require a high level of skill
BAerospace engineers are very responsive to changes in wage rates
CThe government provides support for training programmes
DThere is a fall in demand for aerospace industry products

Show the answer

The answer is A.

TopicThe labour market

Question paper p.3 Mark scheme p.4 Examiner report p.3 Open in the tool

Q41 mark

4 Which one of the following characteristics always applies to a highly contestable market?

AThere is a large number of small firms
BThere are high sunk costs
CThere are low barriers to entry
DThere is imperfect information

Show the answer

The answer is C.

TopicPerfect competition and monopoly

Question paper p.3 Mark scheme p.5 Examiner report p.3 Open in the tool

Q51 mark

5 In 2019 the minimum wage rate in Spain was increased by 22%. If the elasticity demand for labour currently earning the minimum wage is -0.6, then the demand for these workers will

Arise by 13.2%
Bfall by 13.2%
Crise by 36.7%
Dfall by 36.7%

Show the answer

The answer is B.

TopicThe labour market

Question paper p.3 Mark scheme p.5 Examiner report p.3 Open in the tool

Q61 mark

Which one of the following would cause the increase in the wage rate from W to W1 as shown in the diagram?

AAn increase in firms' costs of production
BA decrease in the productivity of labour
CAn increase in demand for the final product
DA decrease in net migration

Show the answer

The answer is C.

TopicThe labour market

Question paper p.4 Mark scheme p.5 Examiner report p.3 Open in the tool

Section B

Case study

The business behaviour of large firms

Extracts: Figure 1: Uber India's revenue for year ending in March in rupees billion (Rs) · Figure 2: Market share of ride-hailing taxi firms in India, December 2017 · Extract A: Predatory pricing in India? · Extract B: End of state-owned coal monopoly in India · Extract C: Price discrimination in Zambia · Figure 1: adapted from https://www.business-standard.com/article/companies/uber-india-sees-moderate-

In the extracts: Zambia Sugar, BHP Billiton, Chief Executive, Coal India, Government's Competition, JUGNOO MERU, Protection Commission, Rio Tinto, UBER OLA, Uber India's

Q7(a)Calculate2 marks

With reference to Figure 1, calculate the percentage change in Uber India's revenue from 2016 to 2018. You are advised to show your working.

TopicPrice discrimination and contestable markets

Question paper p.6 Mark scheme p.6 Examiner report p.3 Open in the tool

Q7(b)Explain4 marks

With reference to Extract B, explain what is meant by 'privatisation'.

Mark splitKnowledge 2Application 2

TopicCompetition policy and government intervention

Question paper p.6 Mark scheme p.6 Examiner report p.4 Open in the tool

Q7(c)Examine8 marks

With reference to Extract B, examine two likely effects of deregulation and privatisation.

Mark splitKnowledge 2Application 2Analysis 2Evaluation 2

TopicCompetition policy and government intervention

Question paper p.7 Mark scheme p.7 Examiner report p.4 Open in the tool

Q7(d)Analyse6 marks

With reference to Figure 2 and Extract A, analyse the likely effect of predatory pricing on the profits of a ride-hailing taxi firm.

Mark splitKnowledge 2Application 2Analysis 2

TopicPrice discrimination and contestable markets

Question paper p.9 Mark scheme p.8 Examiner report p.4 Open in the tool

Q7(e)Discuss14 marks

With reference to Extract C and your own knowledge, discuss the likely effects on consumers of the price discrimination strategy. Illustrate your answer with an appropriate diagram(s).

Mark splitEvaluation 6

TopicPrice discrimination and contestable markets

Question paper p.11 Mark scheme p.10 Examiner report p.4 Open in the tool Draw it: price discrimination diagram

Section C

Q8OptionalEvaluate20 marks

Evaluate why some firms remain small. Illustrate your answer with an appropriate diagram(s).

Mark splitEvaluation 8

Question paper p.14 Mark scheme p.13 Examiner report p.7 Open in the tool Draw it: cost curves diagram

Q9OptionalEvaluate20 marks

To what extent would a perfectly competitive market be more efficient than a monopolistically competitive market? Illustrate your answer with an appropriate diagram(s).

Mark splitEvaluation 8

TopicOligopoly and monopolistic competition

Question paper p.14 Mark scheme p.17 Examiner report p.4 Open in the tool Draw it: perfect competition diagram Or: monopolistic competition diagram

Q10OptionalEvaluate20 marks

Evaluate the extent to which different business objectives may affect a firm's profits. Illustrate your answer with an appropriate diagram(s).

Mark splitEvaluation 8

TopicBusiness objectives

Question paper p.14 Mark scheme p.21 Examiner report p.4 Open in the tool Draw it: monopoly diagram

Question text is quoted from the question papers, © Pearson Edexcel, for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.

Section A

Section B

The business behaviour of large firms

Section C

Other years of Edexcel International A-level Unit 3

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