Process
Edexcel A-Level Business 9BS0
Meeting Customer Needs
Marketing Mix and Strategy
Managing People
Entrepreneurs and Leaders
Financial Planning
Managing Finance
Resource Management
External Influences
Business Objectives and Strategy
Decision-Making Techniques
Influences on Business Decisions
Assessing Competitiveness
Globalisation
Global Markets and Business Expansion
Global Marketing
Global Industries and Companies
The Market
- 5 subtopics
- 24 things to know
- Paper 1 and Paper 3
What The Market covers
The market is the second section of Theme 1. It covers the forces that set a price: what makes demand and supply shift, how the two meet at equilibrium, and the two elasticities that tell a business how sharply its customers react to a change in price or in their own income.
Where it is assessed
Paper 1 and Paper 3
Theme 1, examined on Marketing, people and global businesses, then the pre-released synoptic paper.
Check the Pearson Edexcel specification ↗The 5 subtopics
Each one has its own page.
- DemandWhat demand is, substitute and complementary goods, income, tastes, advertising, branding and demographics as influences on demand, external shocks and seasonality, and the difference between a movement along and a shift of the demand curve.Open →
- SupplyHow production costs, technology, indirect taxes and subsidies shift the supply curve, the external shocks that reduce or increase supply, and the difference between a change in supply and a movement along the curve.Open →
- MarketsThe laws of demand and supply and the shape of each curve, equilibrium price, surpluses and shortages, what happens to price and quantity when either curve shifts, and the factors that shift demand and supply rather than moving along them.Open →
- Price elasticity of demandWhat price elasticity of demand measures and how a value is read, the calculation, what determines whether demand is elastic, and what it means for pricing and revenue.Open →
- Income elasticity of demandWhat income elasticity measures, normal, inferior and luxury goods, and why income elastic products swing hardest with the economic cycle.Open →
What you need to know
Answer each one before you reveal it.
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Process
What causes the demand curve to shift?
Key term
Give examples of external shocks that can affect demand.
Process
How do production costs affect supply?
Process
How do indirect taxes and falling costs affect supply?
Key term
What are external shocks and how do they affect supply?
Key term
How can positive external shocks affect supply?
Key term
Define a market, the law of demand and the law of supply.
Process
What is the equilibrium price, and what happens above it?
Process
What happens to equilibrium when supply or demand shifts?
Process
Distinguish a movement along the supply curve from a shift of it.
Process
How does a change in population size affect the demand curve?
Key term
On a standard supply and demand diagram, what does the vertical axis represent?
Numbers
What does price elasticity of demand measure, and how is a value read?
Process
What determines whether demand is price elastic?
Process
How does brand loyalty affect price elasticity of demand?
Key term
Why would demand for 'Coca-Cola' be more price elastic than demand for 'soft drinks' as a category?
Numbers
What calculation must be performed before determining the PED value?
Numbers
What does income elasticity of demand measure?
Process
What determines a product's income elasticity of demand?
Evaluation
What affects a product's income elasticity, and why does economic growth benefit businesses selling income elastic products?
Evaluation
What risk do businesses selling income elastic products face during economic downturns?
Numbers
State the price-elasticity formula.
Numbers
State the total-revenue formula.
Take The Market further
The same content, four other ways.
Commonly confused
Pairs that lose marks when they are blurred together.
Price elasticity of demand vs Income elasticity of demand
Price elasticity of demand: responsiveness of quantity demanded to a change in price. Income elasticity of demand: responsiveness of quantity demanded to a change in consumer income.
Questions from this topic
Each one with the model answer underneath.
- 1
Define demand in economic terms.
Model answer
Demand is the quantity of a good or service that consumers are willing and able to purchase at a given price in a given time period.
- 2
What happens to demand for a product if the price of a substitute good rises?
Model answer
Demand for the original product increases, as consumers switch away from the now more expensive substitute.
- 3
What are substitute goods?
Model answer
Substitute goods are products that can be used in place of one another to satisfy the same consumer need.
- 4
If the price of a complementary good rises, what happens to demand for the related product?
Model answer
Demand for the related product decreases.
- 5
Define complementary goods.
Model answer
Complementary goods are products that are consumed together, where purchase of one increases demand for the other.
- 6
How does an increase in consumer incomes typically affect demand for normal goods?
Model answer
An increase in consumer incomes generally leads to an increase in demand for normal goods.
What is inside Levo
Six ways to work the same material.
The Market revision questions
- What does The Market cover in Edexcel A-Level Business?
- 5 subtopics: demand, supply, markets, price elasticity of demand and income elasticity of demand. Each one has its own page with questions and model answers.
- How is The Market organised?
- By the Edexcel 9BS0 specification, subtopic by subtopic, so it matches the order you are taught it in.
Every question in The Market, on a schedule.
Attempt a question from memory, write the correct version, then attempt it again. Levo records the jump between your first attempt and your last, and brings each question back on the day you are due to forget it.
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