unit 3 evaluation points

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Unit 3 economics edexcel ;Basic evaluation points for topics that tend to come up
PLEASE REMEMBER THIS ARE ONLY BASIC AND YOU WILL NEED TO APPLY THESE TO THE CASE STUDY
THAT COMES UP GOOD LUCK!
Effectiveness of regulation when it comes down to increasing firms efficiency
YES
Fear of being caught
Fear of bad publicity
Increase quality/choice
Forced to become efficient in the LR
More consumer surplus if decrease prices through efficiency gains
Forced to compete on a non pricing basis= more research and development
Maybe state planning will be better in the interests of the consumers
NO
Brand loyalty ways out the fear of regulation
Less profits mean that there will be less research and development
Regulatory capture
Asssymetric info= can't inforce the proper regulation needed
LR as investigations may take up time
Limit to power
Pricing vs. non pricing strategies
NON-P
Advertising
Increased quality
Investment
Increased efficiency
Promotion
Production abroad= larger market share
P
Sales maximisation
Predatory
Limit
Price discrimination
EVALUTION
Difficult to know the outcome of advertising= sunk costs
Sunk costs from research and development
Price wars may develop = SR benefit for the consumers
It is expensive to improve a produce

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Predatory pricing is illegal
Hard if all firms chose the same strategies
PED determines which is best
Gains from collusion may outweigh the fines
Take overs/ mergers
BENEFITS
Increased market share
Buy into an already mad brand
Improve image
Removal of wasteful competition
Rationalisation
Economies of scale
Access to new markets/patents
Protection from unwanted predators
Synergies within managerial terms
NEGATIVES
Lack of adequate intergration
Debt
Diseconomies of scale
Investigations if they are too big
Potential fail
Bad industrial relations
Delayering
EFFECTS ON CONSUMER
If profits…read more

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To damage profits/image of other firms
To avoid being fined
To increase profits
First mover advantage
EVALUATION
Less trust in the future
Prisoners dilemma=who will confess first?
Size of fine
Threat of a fine
Nash equilibrium not possible
Unbranded products
BENEFITS
More allocative efficiency
Increased consumer surplus
Increase in demand = decrease in price
Lower costs for the NHS
Increased health
NEGATIVES
Consumer wants are compromised
Lower quality as a cost cutting measure
Less research and development as not rewarded for it…read more

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