MEDSTUDY.COM
EDEXCEL A-LEVEL ECONOMICS PAPER 1 EXAM WITH
ACCURATE ANSWERS & EXPLANATIONS | GUARANTEED
PASS | LATEST VERSION 2026
1. Economics - ANSWER The study of the allocation of scarce resources.
2. Economic Goods - ANSWER Resources that are scarce.
3. Short Run - ANSWER A time period where at least one factor of production
is fixed.
4. Long Run - ANSWER A time period where all factors of production are
variable.
5. Market structure - ANSWER the characteristics of a market that determine
the behaviour of firms in the market
6. Natural monopoly - ANSWER where economies of scale are so large
relative to market demand that the dominant producer will always enjoy
lower costs of production than any competitors
7. Non-homogenous goods - ANSWER goods that are similar but not identical,
for example through use of branding
8. Perfect information - ANSWER when all buyers are fully informed of all
prices and quantities for sale, whilst producers have equal information to
production techniques
,MEDSTUDY.COM
9. Product differentiation - ANSWER aspects of a good/service that distinguish
a product from its competition, for example through packaging or marketing
10. Sunk costs - ANSWER costs of production that are not recoverable if a firm
leaves an industry
11. Uncertainty - ANSWER a when one firm does not know how other firms
will react if it changes strategy
12. Perfect competition - ANSWER market structure where there are many
buyers and sellers, freedom of entry and exit, perfect knowledge and where
all firms produce a homogenous product
13. Price taker - ANSWER a firm with no control over market price and must
accept the market price if it wants to sell its product
14. Monopolistic competition - ANSWER a market structure where a large
number of small firms produce non-homogenous products and where there
are no barriers to entry
15. Monopolist - ANSWER a firm that controls all the output in a market
16. Monopoly - ANSWER a market structure where ine firm supplies all output
in the market without facing competition due to high barriers to entry
,MEDSTUDY.COM
17. Price discrimination - ANSWER charging different prices for the same
good/service in different markets
18. Monopoly power - ANSWER when firms are able to control the price they
charge for their product
19. Monopsony - ANSWER when there is only one buyer in a market
20. Contestable market - ANSWER a market with freedom of entry and where
the costs of exit are low
21. Hit and run competition - ANSWER when firms can enter a market at low
cost attracted by high profits and then leave at low cost when profits fall
22. Consumer sovereignty - ANSWER exists when the economic system
allocates resources totally according to consumer preference
23. Cost-plus pricing - ANSWER where firms fix a price for their products by
adding a fixed percentage profit margin on top of the long run average cost
of production
24. Profit maximisation - ANSWER when profit is at its highest // MR=MC
25. Profit satisficing - ANSWER making sufficient profit to satisfy the demands
of owners eg. shareholders
26. Revenue maximisation - ANSWER when revenue is at its highest // MR=0
, MEDSTUDY.COM
27. Sales maximisation - ANSWER when the volume of sales is at its highest //
AR=AC
28. Allocative efficiency - ANSWER where the goods produced satisfy
consumer preferences and maximise their welfare
29. Dynamic efficiency - ANSWER where investment reduces the long run
average cost curve
30. Productive efficiency - ANSWER production at the lowest average cost
31.X-inefficiency - ANSWER inefficiency arising from a lack of competition
32. Creative destruction - ANSWER where firms produce/create new products
that replace existing products on the market
33. Multi-plant monopolist - ANSWER the sole producer in an industry has
multiple places of production which can be sold off to create competition
34. Competitive tendering - ANSWER introducing competition among private
sector firms which put in bids for work contracted out by public sector firms
35. Contracting out - ANSWER getting private sector firms to produce goods
and services then provided by the state
EDEXCEL A-LEVEL ECONOMICS PAPER 1 EXAM WITH
ACCURATE ANSWERS & EXPLANATIONS | GUARANTEED
PASS | LATEST VERSION 2026
1. Economics - ANSWER The study of the allocation of scarce resources.
2. Economic Goods - ANSWER Resources that are scarce.
3. Short Run - ANSWER A time period where at least one factor of production
is fixed.
4. Long Run - ANSWER A time period where all factors of production are
variable.
5. Market structure - ANSWER the characteristics of a market that determine
the behaviour of firms in the market
6. Natural monopoly - ANSWER where economies of scale are so large
relative to market demand that the dominant producer will always enjoy
lower costs of production than any competitors
7. Non-homogenous goods - ANSWER goods that are similar but not identical,
for example through use of branding
8. Perfect information - ANSWER when all buyers are fully informed of all
prices and quantities for sale, whilst producers have equal information to
production techniques
,MEDSTUDY.COM
9. Product differentiation - ANSWER aspects of a good/service that distinguish
a product from its competition, for example through packaging or marketing
10. Sunk costs - ANSWER costs of production that are not recoverable if a firm
leaves an industry
11. Uncertainty - ANSWER a when one firm does not know how other firms
will react if it changes strategy
12. Perfect competition - ANSWER market structure where there are many
buyers and sellers, freedom of entry and exit, perfect knowledge and where
all firms produce a homogenous product
13. Price taker - ANSWER a firm with no control over market price and must
accept the market price if it wants to sell its product
14. Monopolistic competition - ANSWER a market structure where a large
number of small firms produce non-homogenous products and where there
are no barriers to entry
15. Monopolist - ANSWER a firm that controls all the output in a market
16. Monopoly - ANSWER a market structure where ine firm supplies all output
in the market without facing competition due to high barriers to entry
,MEDSTUDY.COM
17. Price discrimination - ANSWER charging different prices for the same
good/service in different markets
18. Monopoly power - ANSWER when firms are able to control the price they
charge for their product
19. Monopsony - ANSWER when there is only one buyer in a market
20. Contestable market - ANSWER a market with freedom of entry and where
the costs of exit are low
21. Hit and run competition - ANSWER when firms can enter a market at low
cost attracted by high profits and then leave at low cost when profits fall
22. Consumer sovereignty - ANSWER exists when the economic system
allocates resources totally according to consumer preference
23. Cost-plus pricing - ANSWER where firms fix a price for their products by
adding a fixed percentage profit margin on top of the long run average cost
of production
24. Profit maximisation - ANSWER when profit is at its highest // MR=MC
25. Profit satisficing - ANSWER making sufficient profit to satisfy the demands
of owners eg. shareholders
26. Revenue maximisation - ANSWER when revenue is at its highest // MR=0
, MEDSTUDY.COM
27. Sales maximisation - ANSWER when the volume of sales is at its highest //
AR=AC
28. Allocative efficiency - ANSWER where the goods produced satisfy
consumer preferences and maximise their welfare
29. Dynamic efficiency - ANSWER where investment reduces the long run
average cost curve
30. Productive efficiency - ANSWER production at the lowest average cost
31.X-inefficiency - ANSWER inefficiency arising from a lack of competition
32. Creative destruction - ANSWER where firms produce/create new products
that replace existing products on the market
33. Multi-plant monopolist - ANSWER the sole producer in an industry has
multiple places of production which can be sold off to create competition
34. Competitive tendering - ANSWER introducing competition among private
sector firms which put in bids for work contracted out by public sector firms
35. Contracting out - ANSWER getting private sector firms to produce goods
and services then provided by the state
