Competition vs Contestability– 25 Mark A-Level Economics Question (Edexcel)

Exam Technique Tutoring : https://forms.gle/owj1pwyGHyqTSjFZ9 Economics Group Chat : https://beacons.ai/udoecon About this video : This video is a walkthrough of a 25 mark A-Level Economics exam question on competition and contestability, based on the Edexcel specification. We go step-by-step through how to structure a high-level essay, focusing on clear chains of analysis, accurate use of theory, and strong application to real-world industries such as supermarkets and fragrances. The aim of the video is to show how to approach 25 markers effectively under exam conditions. I explain the key differences between competition and contestability, and how factors like sunk costs, barriers to entry, and brand loyalty influence how contestable a market really is. We also break down how firms behave in more contestable markets, including pricing strategies, efficiency, and the threat of potential entry. Evaluation is developed through factors such as the role of regulation, economies of scale, and how realistic the assumptions of contestability are in different industries. Question in the video: Evaluate the level of contestability in the fragrance industry or another industry of your choice. Timestamps: 00:00 Introduction to Question 01:36 Defining Key Terms 05:31 Supermarket Industry Analysis 05:46 Sunk Costs and Scale 11:40 Brand Loyalty Impact 13:53 Evaluation and Regulation 16:44 Exam Strategy Topics covered : Contestability, Competition, Barriers to entry, Sunk costs, Brand loyalty, Economies of scale, Pricing strategies, Efficiency, Regulation, Market structure, Evaluation