AQA A-level Economics (new spec) 2-08 Prices, Welfare and Competition

This is a Powerpoint (and accompanying Notes/Key Terms sheet) that I created for my own teaching of the new (linear) AQA A-level Economics specification (7135). As I was also using the AQA-approved textbook (Powell & Powell, 2016) the two follow a similar route through the material.

Topics covered in this Powerpoint:
4.1.5.7 Price discrimination
• The conditions necessary for price discrimination.
• The advantages and disadvantages of price discrimination.
• Students should be aware of real-world examples of price discrimination and be able to assess its impact on producers and consumers.
• A diagrammatic analysis of price discrimination is expected.
4.1.5.8 The dynamics of competition and competitive market processes
• Both the short-run and long-run benefits which are likely to result from competition.
• That firms do not just compete on the basis of price but that competition will, for example, also lead firms to strive to improve products, reduce costs, improve the quality of the service provided.
• The process of creative destruction.
• Students should understand that if firms have monopoly power and are making large profits, over time there will be an incentive for new firms to enter the market and to innovate to overcome the existing barriers to entry.
• Students should understand that this process of creative destruction is a fundamental feature of the way in which competition operates in a market economy.
4.1.5.9 Contestable and non-contestable markets
• The significance of market contestability for the performance of an industry.
• Concepts such as sunk costs and hit-and-run competition.