Edexcel IGCSEEconomicsGeneral Applications5 Marks
[Figure 1] shows the total cost curve for a firm producing smartphones.
- (a)With reference to [Figure 1], identify the range of output where the firm experiences economies of scale.[2]
- (b)Explain one source of economies of scale that a large smartphone manufacturer might experience.[3]
This question uses a diagram from the original paper, which isn't shown here. Open the full paper from the past papers archive to see it.
Mark scheme
Marking points from the official mark scheme. The mark or mark type is shown in brackets.
- 3(a) AO2: (Max 2 marks)
- - Identification of the correct range of output (e.g., up to 500 units) (1)
- - Link to falling average cost or increasing returns to scale (1).
- 3(b) AO1/AO2: (Max 3 marks)
- - AO1 (1 mark) for identifying a source (e.g., bulk buying/purchasing economies, technical, financial, managerial).
- - AO2 (2 marks) for developing the explanation of how it leads to lower average costs (e.g., bulk buying leads to lower per unit cost of raw materials due to discounts, reducing average costs).
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