2018 H2 Economics Paper 2 Essay 2: Suggested Answers
How to use these essay answers. The responses below, including the part (a) answer, are structured guides to the requirements of the question, the content, analysis and evaluation a strong answer must cover, rather than full essay prose with a written introduction and conclusion. Use them to see what to include and how to build the argument, then write it up in your own continuous prose, adding your own introduction and conclusion.
This essay considers an air passenger market with rising competition and capacity pressure, where falling jet fuel prices lower variable costs while aircraft prices raise fixed costs, and asks how airlines would likely respond using economic analysis.
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Using economic analysis, discuss how airlines would likely respond to these changes.
- Frame airlines as profit maximising firms in an oligopoly and set out why profitability is squeezed by the cost and competition changes.
- Reason through the net effect on costs given the opposing movements in variable and fixed costs.
- Develop a first cost or scale based response and the mechanism by which it protects profit.
- Develop a second response aimed at cost certainty, and a third aimed at the network, noting the trade-offs of each.
- Develop a non price, product based response and explain how it sustains revenue without a price war.
- Weigh the responses against each other and conclude on the likely mix and what its success depends on.
This part is gated. The full model answer with the worked cost and revenue diagram, the four strategies and the evaluation, with the diagrams and the full evaluation, is in the ETG TYS Answers book from SAP and is worked live in the TYS Crashcourse. ETG students also get the AI TYS coach that guides them through this exact question. Message the team to find out more.
Tests: Oligopoly, Economies of scale
Questions students ask
Where can I get the full worked answers to the 2018 H2 Economics paper 2 essay 2?
The full model answers, with the diagrams and the higher mark evaluation, are in the ETG TYS Answers book published by SAP and sold at Popular, and are worked live in the TYS Crashcourse. Every ETG student also gets the AI TYS coach on our learning management system, which guides you through how to tackle every essay and every case study question from the last ten years.
Are these the official 2018 A Level Economics answers?
No. SEAB sets and marks the A Level paper. These are suggested answers by Mr Eugene Toh, author of the H1 and H2 A Level Economics TYS answer keys, published by SAP and sold at Popular.
How should I use these suggested essay answers?
Treat them as a guide to the requirements of the question, the content, analysis and evaluation a strong answer must cover, not as full essay prose. Write the essay up in your own continuous prose, with your own introduction and conclusion.
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