Normal Profits, Supernormal Profits and Losses — Edexcel Past Paper Questions

A small hotel in Scarborough has seen its energy bills increase from £2 000 to £8 000 per month. Small businesses do not have the energy management teams of larger companies to negotiate better deals. (Source adapted from: https://www.ft.com/content/d07797e7-2eb7-4240-b15d-692b39510def) Evaluate the microeconomic effects of rising energy bills on the hotel industry or an industry of your choice.

One of two options in Section C — candidates answered this or the other.

3.3.2 Costs · 3.3.4 Profits and Losses

Using a cost and revenue diagram, discuss the likely impact of ‘rising costs’ for coffee shops on their profitability (Extract A, line 2).

3.3.2 Costs · 3.3.4 Profits and Losses

With reference to Extract C, discuss the proposed government subsidy to prevent Thomas Cook from reaching its shut-down point.

3.3.4 Profits and Losses · 1.2.9 Indirect Taxes and Subsidies

Discuss factors that are causing many high street retailers in the UK to close some branches or shut down completely. Use a cost and revenue diagram to support your answer.

3.3.2 Costs · 3.3.4 Profits and Losses

Discuss one likely reason for the rise in BT’s profit (Figure 2, Extracts B and C). Use a cost and revenue diagram to support your answer.

3.3.4 Profits and Losses · 3.3.1 Revenue

Discuss the likely impact of the National Living Wage on the profitability of firms. Use a cost and revenue diagram in your answer.

3.5.3 Wage Determination · 3.3.4 Profits and Losses