Economics WEC13/01 June 2023

Edexcel International AS/A Level Economics (WEC) Jun 2023

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1. Market structures: UK food delivery market characterized by oligopoly with few dominant firms (Just Eat, Deliveroo, Uber Eats), intense price competition, advertising battles, and market share struggles.
2. Cost and revenue dynamics: Deliveroo’s rising total revenue (2017–2021) accompanied by increasing losses due to rising marketing, fixed costs, fuel price hikes, inflation pressures, and slowing revenue growth.
3. Demand factors: Increasing urban population, rising internet connectivity and smartphone usage, consumer preference shift to online ordering, and aggressive marketing expenditures driving demand growth for online food delivery.
4. Business strategies: Use of price wars, heavy advertising campaigns, product differentiation (grocery deliveries addition), and strategic efforts to increase market share and push competitors out.
5. Game theory analysis: Strategic interdependence of firms in price setting and advertising decisions, leading to potential prisoner’s dilemma outcomes, mutual retaliation, and sustained competition in oligopolistic market.
6. Exam question themes: Analysis of market structure, demand and supply factors, profit/loss examination, business strategy evaluation, and application of game theory concepts to competitive business environments in food delivery sector .