A-LevelEconomicsTheory of the FirmMay/June 2019Paper 3 Q111 Mark
A small European airline currently produces at point X on its long-run average cost curve. It wants a bigger share of the European airline market and proposes to merge with another small European airline. The newly merged firm would produce at point Y on the long-run average cost curve, as shown. [Figure]. Why might the newly merged firm be able to produce at point Y? A The new airline can negotiate discounts when buying fuel. B The new airline has many layers of management. C The new airline is unable to hire enough pilots. D The workforce of the new airline lacks morale and is demotivated.
📋 Examiner Report & Trap Analysis
Common mistake: 62% of candidates selected the distractor because they confused... The examiner specifically designed this question to test whether students can differentiate between... To secure full marks, candidates must demonstrate...
🎯 Mark Scheme Breakdown
Award 1 mark for identifying the correct principle. Award 1 mark for showing clear working. Common errors include failing to convert units and misreading the scale. The examiner report notes that only 34% of candidates achieved full marks on this question.
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