A LEVEL ECONOMICS
NOTES
Evaluate how the geographical immobility of labour can be tackled
Point 1: Nationalisation of rail industry
Under private control the rail industry aims to maximise their profits so profit maximise at MC=MR
When the government nationalises the industry they aim to maximise consumer welfare so will move
operation closer to the allocatively efficient output at P=MC
Therefore, prices fall from P1 to P2 which is beneficial for the consumer and consumption increases
from Q1 to Q2=
NOTES
Evaluate how the geographical immobility of labour can be tackled
Point 1: Nationalisation of rail industry
Under private control the rail industry aims to maximise their profits so profit maximise at MC=MR
When the government nationalises the industry they aim to maximise consumer welfare so will move
operation closer to the allocatively efficient output at P=MC
Therefore, prices fall from P1 to P2 which is beneficial for the consumer and consumption increases
from Q1 to Q2=
