Revise Theme 3 with interactive flashcards written to the Edexcel A (9EC0) specification — business growth and objectives, the cost and revenue toolkit, market structures and the labour market. Flip each card to check yourself, rate how well you knew it, and the deck brings back the cards you found hard. Every card links to the revision notes page that teaches it, and the deck is growing.
97 cards · 20 topics · Edexcel A Theme 3: Business Behaviour and the Labour Market
Why do firms grow — and why do some stay small?
The underlying incentive is profit. Growth brings economies of scale, market power over prices and suppliers, easier access to finance, and stronger brand recognition.
Firms stay small because of diseconomies of scale, market conditions (niche or fiercely competitive markets), or owner preference — keeping control and a manageable lifestyle over expansion.
Define and give the formulas for total, average and marginal revenue.
TR = P × Q, the firm's total earnings from sales. AR = TR ÷ Q — which simplifies to the price per unit, so the AR curve is the firm's demand curve. MR = ΔTR ÷ ΔQ, the additional revenue from selling one more unit.
Show profit maximisation on a firm diagram.
Profit is maximised at the output Q where MC = MR: below Q each extra unit adds more revenue than cost; beyond Q it adds more cost than revenue.
Read the price P off the AR curve at Q and average cost C off the AC curve — with P above C, the gap times Q is supernormal profit.
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