Edexcel A Level Economics A Paper 1: Markets and business behaviour June 2025 question paper 9EC0/01

Calculate the change in total supernormal profit if the restaurant changes its objective from revenue maximisation to profit maximisation. You are advised to show your working.

Refer to the previous diagram. There is a reduction in the demand for pizza.

Ceteris paribus, which one of the following will happen to the restaurant’s average revenue and marginal revenue as a result of this change?

In 2022 the UK government provided 130 new licences for North Sea oil and gas exploration, in order to reduce energy prices. However, companies can take 20 years to begin to extract oil. Furthermore, they often have to continue producing oil even when prices fall because the equipment has no other uses.

(Source: adapted from https://www.theguardian.com/environment/2022/dec/12/ uk-ministers-face-legal-challenge-over-north-sea-oil-and-gas-licences)

With reference to the data above, explain the likely numerical value of the price elasticity of supply for oil.

The cross elasticity of demand for petrol cars with respect to the price of diesel cars is estimated to be +0.64.

Which one of the following is the most likely impact if the price of diesel cars falls by 10%?

The diagram below shows the equilibrium position of a dental practice operating in a monopolistically competitive industry.

Which one of the following applies to the dental practice’s equilibrium at point E?

The dental practice is:

average cost

marginal revenue

The government subsidises dental care in the UK through the National Health Service (NHS). There has been a large decrease in the work carried out by NHS dentists. Up to 90% of practices are not accepting new NHS patients.

(Source: adapted from https://www.theguardian.com/society/2023/jul/14/ mps-demand-urgent-reform-nhs-dental-services-report)

Draw an externalities diagram to identify the welfare gain area from the consumption of dental care in the UK.

Nearly 750 000 consumers in Britain face unresolved problems with used car purchases every year. Older vehicles tend to have more faults and increase the risks facing a potential buyer.

(Source: adapted from https://www.gov.uk/government/news/new-approach-to-give-second-hand-car-buyers-a-better-deal)

With reference to the data above, explain how imperfect market information may lead to a misallocation of resources in the used-car market.

In September 2022, the online retailer, Amazon, increased the price of its Prime service from £7.99 a month to £8.99. As a result, almost 600 000 people cancelled their subscriptions.

(Source: adapted from https://www.telegraph.co.uk/business/2022/08/17/ hundreds-thousands-uk-households-ditch-amazon-prime/)

Which one of the following is the most likely explanation of this behaviour?

These consumers:

The National Minimum Wage for people over 23 rose by 9.7% to £10.42 in April 2023. The industry most affected is hospitality.

(Source: adapted from https://www.gov.uk/government/publications/the-national-minimum-wage-in-2023/the-national-minimum-wage-in-2023)

Draw a labour market diagram to show the likely impact of the increase in the National Minimum Wage for hospitality employees.

There has been a significant decrease in the supply of agricultural workers in the UK. Which one of the following is the most likely cause of this decrease?

(a) With reference to Extract A, explain one likely impact of the growth of digital markets on allocative efficiency.

(b) With reference to Extract C, examine two effects of increased ‘automation’ on the demand for labour.

(c) With reference to the information provided, discuss whether the price elasticity of demand for video games is elastic or inelastic.

(d) With reference to the information provided, assess whether the market for video game development is contestable.

(e) Discuss the likely benefits of mergers for firms such as Microsoft.

With reference to Extract A, explain one likely impact of the growth of digital markets on allocative efficiency.

With reference to Extract C, examine two effects of increased ‘automation’ on the demand for labour.

With reference to the information provided, discuss whether the price elasticity of demand for video games is elastic or inelastic.

With reference to the information provided, assess whether the market for video game development is contestable.

Discuss the likely benefits of mergers for firms such as Microsoft.

High Speed 2 (HS2) was a £100 billion UK government rail project designed to expand the existing network. The journey time between London and Manchester would take just 1 hour and 11 minutes, 54 minutes quicker than today’s fastest time. Almost 900 homes, 1 000 businesses and around 60 ancient woodlands would be destroyed by its construction.

(Source: adapted from https://www.independent.co.uk/climate-change/news/ hs2-railway-route-houses-demolish-woodland-destroy-environment-impact-london-birmingham-manchester-a8582316.html)

Evaluate the likely microeconomic effects of building major infrastructure projects.

In 2023, the UK prime minister Rishi Sunak said that he wanted to see all students in England study some form of mathematics until they reach the age of 18 to ‘ensure that they leave school better equipped for the jobs of the future’. This would require additional spending on education.

Just half of all 16 to 19 year-olds study mathematics. Yet in a world where data is everywhere and statistics are vital in every job, the workforce will require more analytical skills than ever before.

(Source: adapted from https://educationhub.blog.gov.uk/2023/01/04/ studying-maths-to-18-what-you-need-to-know/)

Evaluate the likely microeconomic effects of increased spending on education.

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