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Summer 2010
GCE
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Summer 2010
Publications Code UA023774
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General Observations
Up to 2 marks can be awarded for knocking out incorrect options, if a valid reason
is given, with one mark for each. The letter of the excluded option must be
given.
If the letter option chosen is incorrect there is a maximum of 2 marks for
explanation, except in cirmcumstances which make it clear the candidate made a
clerical error.
Non-price competition
• networks to distribute electricity,
• advertising,
• marketing;
• special discounts to other distributing
companies
• Mergers, collusion or other ways to
remove competition can be seen as a way to
compete
OR Duopoly (1 mark)
Explain: two firms dominate market
Evaluation 4 marks
Consideration of reasons why market is not
contestable Award as 4 or 1+3 or 2+2 or or 2+1 or
1+1
• Highly concentrated market: Nescafe
supplies over half the market which
implies high barriers
• Strong brand names – examples from
Figure 1 – supported by heavy advertising
(high sunk costs)
• Cost of machinery required
• Entry only by well-established firms (8)
• Patent on Via is a legal barrier
• 20 years of research into Via
• Extract 1 £17m promotional campaign by
Nescafe