All five topics
All five Unit 3 topics, in spec order
Open any topic straight in the app.
Types of business and the size of businesses, organic growth, mergers and takeovers, horizontal, vertical and conglomerate integration, the constraints on growth, demergers and business objectives.
- aTypes of BusinessPrivate sector and public sector · not-for-profit · co-operatives · joint ventures
- bThe Size of BusinessesSMEs · large corporations · why some firms stay small
- cHow Businesses GrowOrganic growth · mergers and takeovers · horizontal integration · vertical integration · conglomerate integration
- dConstraints on Growth & Its ImpactSize of market · access to finance · regulation and bureaucracy · workers and consumers
- eDemergersReasons for demergers · the impact of demergers
- fBusiness ObjectivesProfit maximisation · revenue maximisation · sales volume maximisation · satisficing · divorce of ownership from control
Revenue, cost and profit analysis: total, average and marginal revenue, the law of diminishing returns and the seven cost measures, LRAC and minimum efficient scale, economies and diseconomies of scale, and normal profit, supernormal profit and the shutdown points.
- aTotal, Average & Marginal RevenueTotal revenue · average revenue is the price · marginal revenue
- bRevenue & Price Elasticity of DemandElastic, unit elastic, inelastic · the revenue effect
- cDiminishing Returns & the Seven Cost MeasuresLaw of diminishing returns · marginal product · average product · fixed and variable cost · marginal cost
- dThe Long Run, LRAC & Minimum Efficient ScaleShort run and long run · LRAC · minimum efficient scale
- eEconomies & Diseconomies of ScaleInternal or external · internal economies · external economies · diseconomies
- fProfits, Losses & the Shutdown PointsNormal profit · supernormal profit · short-run shutdown point · long-run shutdown point
The spectrum of market structures: efficiency and concentration ratios, perfect competition, monopolistic competition, oligopoly, monopoly and third-degree price discrimination, monopsony and contestable markets, and how each shapes price, profit and efficiency.
- aEfficiency & ConcentrationAllocative efficiency · productive efficiency · dynamic efficiency · X-inefficiency · concentration ratio
- bPerfect CompetitionAssumptions of perfect competition · supernormal profit · normal profit · shutdown point
- cMonopolistic CompetitionProduct differentiation · long-run tangency · excess capacity
- dOligopoly: Barriers, Interdependence & CompetitionBarriers to entry · game theory · collusion · price wars · non-price competition
- eMonopolyProfit-maximising equilibrium · natural monopoly · third-degree price discrimination · efficiency
- fMonopsony & ContestabilitySingle buyer · contestable market · sunk costs · pricing
How wages and employment are set — the demand for labour as a derived demand, the supply of labour to an occupation, equilibrium in competitive markets and in the public sector, and the immobility that makes labour markets fail.
- aThe Demand for LabourDerived demand · productivity · wage vs price of capital · elasticity
- bThe Supply of LabourPopulation · net migration · tax and benefits · elasticity
- cWage Determination in a Competitive MarketEquilibrium · shifts in demand and supply
- dTrade Unions and Public-Sector PayUnion influence on supply · wage setting in the public sector
- eMarket Failure in the Labour MarketGeographical and occupational immobility
Why governments intervene in product and labour markets — controlling monopolies and mergers, promoting competition, protecting suppliers and employees, and the limits of what intervention can achieve.
- aControlling Monopolies and MergersPrice and profit regulation · quality standards · mergers
- bPromoting CompetitionDeregulation · privatisation · competitive tendering
- cProtecting Suppliers and EmployeesLocal sourcing · employment legislation · nationalisation
- dImpact and LimitsPrice, profit, quality and choice · regulatory capture · information gaps
- eWage ControlsMinimum wage · maximum wage · monopsony
- fTaxes, Mobility and Fair TreatmentNational insurance · immobility · discrimination and exploitation
Unit overview
What you need to know for WEC13
- Diagrams drive marks
- MC/AC/AR/MR for every market structure. Draw them accurately and label them clearly — diagrams are the backbone of Unit 3 answers.
- MC = MR is universal
- The profit maximisation condition applies in every market structure. Understand why firms produce where MC = MR and you can tackle any question.
- Static vs dynamic efficiency
- The big trade-off in evaluation. Monopolies may be allocatively inefficient but can achieve dynamic efficiency through supernormal profits funding R&D.
- Contestability changes everything
- Focus on barriers to entry and sunk costs, not firm count. A market with few firms can still behave competitively if the threat of entry is credible.
Exam paper info
WEC13 at a glance
Assessment details
- Exam paper
- WEC13
- Duration
- 2 hours
- Total marks
- 80 marks
- % of IAL
- 25%
- Question types
- 24681420
- Data response
- Yes — Section B
- Essay questions
- Section C — choose 2 of 3
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