Contextual analysis

• What has caused a decline in restaurant dining?

  Technological advances like food delivery apps
• Why are food delivery apps considered substitutes for dining out?

  They save time and provide convenience
• What industry has declined due to online articles replacing newspapers?

  Print journalism
• How have e-commerce businesses affected print journalism?

  They lower costs and prices for consumers
• What major event caused a drop in demand for plane tickets?

  The coronavirus pandemic
• How did the pandemic affect the aviation industry?

  It forced airlines to furlough workers
• What type of businesses saw increased sales during lockdowns?

  E-commerce businesses
• What was Amazon's profit increase during the pandemic?

  200% increase to $6.3 billion
• Which company benefited from the closure of gyms during lockdowns?

  Peloton
• How did Peloton's revenues change during the pandemic?

  They rose by 172% to $607 million
• What is price elasticity of demand?

  It measures how demand changes with price
• What type of goods are furniture stores considered in terms of price elasticity?

  Price elastic
• Why is the demand for electricity considered price inelastic?

  It has few substitutes and is a necessity
• What does unitary price elasticity mean?

  Quantity changes proportionally to price
• What can cause a decrease in supply in the supermarket industry?

  Tariffs on imports and exports
• How do natural disasters affect housing supply?

  They can destroy houses and reduce supply
• What is one major cause of an increase in supply?

  Innovation
• How does spare capacity affect price elasticity of supply?

  It makes supply more elastic
• What is the main objective of firms during the pandemic?

  Survival
• What characterizes monopolistic competition?

  Many sellers with differentiated products
• What is a key feature of oligopoly in the supermarket industry?

  High market share by a few firms
• How do budget airlines increase competition in the airline industry?

  By offering low prices through leasing planes
• What are the factors that shift the demand curve?

  • Technological advances (e.g., food delivery apps)
  • Substitution by online articles for newspapers
  • Impact of the coronavirus pandemic on aviation
  • Increase in e-commerce sales during lockdowns
  • Growth in demand for home fitness equipment (e.g., Peloton)
• What are the factors that shift the supply curve?

  • Tariffs affecting imports and exports
  • Natural disasters impacting housing supply
  • Innovation increasing supply efficiency
• What are the objectives of firms in different contexts?

  • Profit maximization (e.g., Moderna)
  • Ethical objectives (e.g., Pfizer)
  • Market share maintenance (e.g., British Gas)
  • Survival during economic downturns (e.g., firms during COVID-19)
• What are the characteristics of different market structures?

  • Perfect Competition: Many buyers/sellers, homogenous goods
  • Monopolistic Competition: Many sellers, differentiated products
  • Oligopoly: Few firms dominate market share, high barriers to entry
• What has allowed many sellers to enter the market?

  Lower start-up costs
• How has differentiation among goods affected new firms?

  It has encouraged competition among sellers
• Which companies have taken a majority of the market share in fashion?

  Boohoo plc and ASOS
• Why are budget airlines more competitive?

  They lease planes to reduce operating costs
• What industry operates as an oligopoly in the UK?

  The supermarket industry
• What percentage of market share do the Big 4 supermarkets own?

  More than 70%
• What is 'land banking' in the context of supermarkets?

  Buying land to prevent competitors from building
• How do the Big 4 supermarkets enhance their market share?

  By contributing to corporate social responsibility
• What minimum wage did Morrisons pay all staff in January 2021?

  £10 per hour
• What is a duopoly?

  A market dominated by two firms
• Which two companies are considered a duopoly in aerospace?

  Boeing and Airbus
• What percentage of market share do Boeing and Airbus hold?

  More than 90%
• What geopolitical factors influence Boeing and Airbus competition?

  Ownership: Boeing is American, Airbus is European
• What market share does Google control in search engines?

  70%