Evaluate the level of contestability in the fragrance industry or another industry of your choice
Edexcel A-Level Economics 25 Mark Essay Plan
Bytedance, which owns TikTok, has launched its own fragrance ‘Emotif’. The Beijing-based social media giant has already entered the food and drink markets. Evaluate the level of contestability in the fragrance industry or another industry of your choice. (June 2024)
Paragraph 1
- Argument: one reason the supermarket industry is non-contestable as supermarkets develop high levels of customer loyalty through non-price competition
- Diagram: game theory, monopoly diagram
- Evaluation: social media has made it easier and cheaper for small brands to improve their marketing
Paragraph 2
- Argument: another reason the supermarket industry is not contestable is because of high sunk costs and high barriers to entry
- Diagram: L-shaped lrac diagram
- Evaluation: deregulation can make it easier for new firms to enter the market, Lidl and Aldi are able to compete
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