Right. Hi everyone. This video is for LXL Alevel business and then we're going to look at all of the calculations you might see in theme one. So this would be useful if you're doing an AS paper on paper one or if you're doing paper one or paper three potentially for um the A level. So in this video we're going to look at these different calculations. I'll go through these more in a bit. Obviously I'm going to go through each single each one. I'm going to talk about what they mean, what the formulas that you need are. Um, I'll talk you through like a general example and then I'll show you a pass exam question. You might be looking at this and thinking market pricing, I've not seen that. Yeah, we haven't seen it actually on the Alevel specification. It's only been seen so far as a calculation on the international A level, but you know, it's it's in there somewhere and so it's worth just going through even if it's a pretty straightforward one even if you've never seen it before. So, let's go through a bit of an introduction as to what to expect from this video and how to use it effectively. And then we'll get straight into the different calculations. So, calculation basics. Paper one and paper two look like this. So, I'm just going to remove myself so I'm not in the way of the text that comes up at the bottom. Paper one and paper two have two sections. Each worth 50 marks and there's two four markers in each section. In paper one or two, the calculation question is going to be a four mark question. The reason I specify this is because it's different in paper three. And you need to be aware of this before thinking about any of the calculations whether you're looking at a paper one, paper two, or paper three. Uh paper three instead of the four markers has an eight marker. And in paper three it could be well it will be that calculations might be used as part of an essay question. So you don't just need to know how to calculate, you need to know what the calculations actually mean. So hopefully I'll talk through those a little bit a little bit as we go through. So, how do you get some practice calculation questions? My advice would be go into the description, have a look at this exam question grid. I'm going to put this in the description so you can view it. If you go on there and you look for particular topics. So, for example, we're going to do supply and demand curves later on in this video. If you look at the demand section, you can see all of the past exam questions that have come up on this topic in previous years, including AS papers and A2 papers just for a bit of extra variety of practice. So each of the sections we're going to go through has an example question. It's taken from this grid. So you can go through and have a look at these. The obviously if it's a paper one or two, it's going to be a four marker. But if it's a paper three and that's in the second column, you could potentially see like an essay question on this as well. So for example there, if you look halfway down, you've got an A23 paper 3 question 2020 which says using a supply and demand diagram, assess two reasons why live entertainment business revenues in the UK might have increased in 2017. That question requires you to draw a diagram and talk about it. So you would talk about whether it's an increase in supply or demand or a decrease in supply and demand. So when we go through these um we'll I'll talk about kind of like about what I would expect you to do in this um in this video. So we'll start with market share. So we're going to look at a calculation. We're going to look at the meaning of the calculation and we're going to look at an example like a general example that I'm just going to put together. Then I'm going to show you a practice exam question. So my advice would be pause it when you get up to the press exam question and then give it a try and then unpause it and see if your answer's correct. So the calculation for market share is the total is the business sales divided by the total market sales times by 100. It's a percentage. The meaning is that it's a percentage of the total market sales that is earned by one business. So for example, if a business has £3.2 million in sales and the total market generates £32 million in sales, their market share would be 3.2 2 million over 32 million times by 100 is 10%. So I gave you some pretty easy numbers there for that one. So we've got a practice exam question here. Um using the data and extract D and a calculation question will always say using the data in etc. Um to prompt you to basically know that you need to use the data and do a calculation. Calculate N's market share of the worldwide sports footwear in 2018. State your answer at two more places. You advised to show you're working out. So pause this have a look at that case study on the left hand side. give this question a try and then press play when you're ready to have a look at the answer. So for this one, this is the bit of information we need. Um we are looking at 2018, so we're looking at the white columns. And then what's really important is we don't miss that little bit at the bottom where it says sales value of all other sports footwear brands not included in the chart, 16.7 billion. One of the most common mistakes with this question was students didn't see that last bit. So for this one, we know that Nike sales are 22.3 billion. That's the first part of that of that graph, the the line graph there. Sorry, the bar chart, I should say. Um, and all my different types of chart. Uh, we need the Nike bid. We also need the total. So, we're going to do the total from Nike, which is 22.3, the 14.6 from Adidas, the 2.9 from AS6, the 2.5 from Puma, the 1.1 from Under Armour, and the 16.7 uh from the others. That's going to give us a total of 60.1 billion. And then we do the calculation we talked about earlier. So 22.3 divided by 60.1 times by 100 is 37.1%. So that will get you four marks. Okay, that's kind of the gist of how this video is going to go. Hopefully that's pretty easy to follow. So market growth calculation is change over original times by 100. I guess I've had to go with a general one there just because the this can be applied in so many different ways. So it is effectively about how much the market size has grown or decreased. Usually these markets are growing. So an example here for would be if the market is worth 4.6 billion in 2023 and 5.3 billion in 2024 calculate the market growth. So we would look for the change which is the difference between the two. So the difference is 0.7 billion. And then when we do the change over the original the original it was worth 4.6. So that's the original. Um 0.7 over 4.6* 100 is an increase in uh as of 15.22%. So again we've got an example question here. This one is about uh the sportsear market. So percentage market growth for sportsear from 2019 to 2022. You're advised to show your work. So again, pause this, give this one a try, and then press resume when you're ready. So for this one, we need this piece of the case study. So it's not in um it tells you which extract, but it doesn't tell you which bit. Obviously, we're looking for the growth. The sportsware sector is predicted to grow from 5.3 billion in 2019 to 6.7 in 2022. So 2019 was 5.3, 2022 was 6.7. So the change is going to be 1.4. So 1.4 over the original which was 5.3 times by 100 gives us 26.42%. So that's our four marks, right? Market map. This is our first example of a construct question, which is to say that it's not a calculation. You've got to draw something. So I've chucked this one in because we've seen this before. Um I think we've only seen it once, but it's been come up once. So we need to be prepared that it could potentially come up again. So a market map is a chart showing how a business or product is positioned within their market. So if we look at like the market map for UK supermarkets, we would split this by different criteria. Usually would go like high price, low price, high quality, low quality. And generally now this the key thing here, right, is this is subjective. So it's really easy to get marks. You just need to put some data on there. It is subjective. So whether you think something's high price or low price is kind of irrelevant to um or the what the examiner thinks is kind of irrelevant because they've got to give you credit for what you think, you know, as long as you're not completely off base. So if we're thinking supermarkets, I would be saying that like Wros and Marks Spencers are high price, high quality. Aldi and little are low price, low quality. You probably could add Iceland to there as well. And then the others are kind of in the middle of the market, right? Sainsburries, Tesco, Morrison's, and Asda. They're kind of like they're not high quality, they're not low quality, they're not high price, they're not low price. So the idea is like you get your marks from labeling your axis, labeling your kind of like um spectrums there and then putting businesses on there. So this is a question we've seen. It might have been an as question, but we've seen nonetheless. I'm just going to remove myself. Uh in fact, I'm just going to switch myself over to the other side so that I'm not in the way. Um because I got the technology to do this apparently. We have got a market map to illustrate the impact of Markx and Spencer's decision to aim its clothing range at a younger target market. So Marks and Spencers have planned to revive their brand. Um they have there's a few things they've said in here. Uh have a go at this one first and then unpause them. We'll go for it. So it says they need to attract a younger set of customers. uh the top end of their demographic um like next demographic of 22 25 to 45. There's an interesting bit there because they've mentioned a competitor. We're going to put that on the map just to sort of get some extra application. And they've also acknowledged that some of their clothing needs to be more competitively priced. So I've gone there's a mention of young and old. So I've put that on there. And there's a mention of price. So I've put high price and low price. You could have gone high quality, low quality. Again, the key thing is that you've just kind of like balanced this out and you've put things in the right place. So you'll get some marks for your high price, low price, old, young. I've gone with old or young. Your other marks will come from placing businesses. Now obviously you need to place Marks and Spencers, but I would also be placing other businesses in the market that they tell you about next. So I would be using Next. So I put like maybe Marks and Spencers and Next at a similar kind of place. I think Marks and Spencer is a little bit older, so I've moved it a little bit closer towards older, but the key thing is they're trying to position themselves younger, so I've put it in that younger section. And then just just as another example, I've put Primark in there where if you look at like lower price but younger, you could put Primark in there just it just means that we've got our application. Okay, so that will get you four marks, right? Supply and demand diagrams. So supply and demand diagrams are the other construct question. I'm going to put these both together. So the meaning of a supply and demand diagram. Let's define supply and demand. Demand is the quantity of a product that a consumer is willing or able to purchase. Supply is the quantity of a product that a business is willing or able to sell. And we're going to look at four examples here. I am going to remove myself to get out the way. So, we're going to look at two shifts in demand and two shifts in supply because they could increase or decrease. So, let's start with a shift in demand. We've got price and quantity. We're going to label our access price and quantity. That actually gets you one of the marks, but I'm going to talk about that in a bit more depth when we look at the practice exam question. Supply points to the sky, demand points down. The idea of course simple is that when the price is higher, the business is more willing to supply a higher quantity because they're going to make more profit on that sale. If the price is higher though, demand will be lower because consumers don't want to pay the high prices. When prices are lower, demand is at its highest because consumers will buy more and be able to buy more when the price is low. But businesses won't be as interested in supply in this because they aren't going to make as much profit. So in this situation, if it's a shift in demand, usually it's because it's something that impacts on consumers, then what we would see is we'd see a right shift in demand. So the right the the demand curve just shifts over. We put a D1. We would draw equilibrium on here as well. I'm going to touch on that when we do the example. I haven't done it for all of these just because they're quite small and it would it would clog it a little bit. Um if we were seeing a decrease in demand, we would see a left shift. For a supply, it's going to be the supply line that shifts. So if it's an increase in supply, this would usually be because production costs have got cheaper or it's become easier to produce the product. We would see a right shift in supply and then obviously left shift in supply as well. So the key point here is really that the only two decisions you've got to make are is it supply or demand that's shifting and is it increasing in which case it's going to the right or is it decreasing in which case it's going to the left. So with this one, we've got draw supply and demand diagram to show the possible impact of the change in the price of gold between the 6th of December and the 5th of January. That covers the entire chart. It doesn't always. Sometimes they might target a specific part of it. But what we can see generally speaking here is the price of gold has increased, right? So we're going to label our diagram price and quantity. That's going to get you one of the marks. We're going to draw supply and demand curves. That's going to get us another one of the marks. Now bear in mind two out of four marks is a C grid and you haven't actually done anything yet. You've just drawn four lines and written four letters. So you shouldn't get less than two. If if you do this you'll get two marks even if you don't bother attempting the question. Now for this one what we're seeing is we are seeing that there is an increase in the cost of um gold. An increase in the cost of gold affects the production cost for the business. It says there gold is one of the raw materials used in the manufacturer of luxury watches. If it's increasing the cost it's going to decrease supply. So, we are going to see a left shift in supply. And then this is the bit I didn't have in my previous examples because they were small, but I'm going to put it in here. That's the third mark, the shift in supply being correctly labeled. The fourth mark is going to come from recognizing the equilibrium points where where supply and demand meet. So, the first one is going to be P and Q. The second, because we've got our S1 line, is going to be P1 and Q1. So, that gets you the four marks basically. Hopefully, that's pretty straightforward, right? Price elasticity of demand probably I think price and income elasticity of demand are probably the two hardest in theme one. The price elasticity demand calculation is price elasticity demand is percentage change in quantity over percentage change in price. If you're looking for an interesting way of remembering this we always talk about this in class about how to remember which way around it is. You always before you pay, right? And so it's just a helpful way of knowing the the order of those two. We're going to potentially have to rearrange this. We'll look at some examples of that. So, if we're going to rearrange it, we'd need to use this triangle. So, we put the same equation as this triangle. I'm sure you're familiar with this from like GCM maths and stuff like that, but what it effectively means is you can cover different parts of it. So, if we're trying to work out percentage change in quantity, we would do price losses demand times by percentage change in price. If we're trying to work out percentage change in price, we would do quantity demand over price demand. And if we're trying to work out price demand, we obviously know we do quantity over price. The meaning behind this is it's how much the demand of a product changes when the price changes. The more elastic, the more demand changes. If it's inelastic, demand doesn't change by that much. So, if I'll get rid of myself here again, if product A's sales have increased from 40,000 to 42,000 after they reduced their price from 12 to10, calculate their price last demand. Price elasticity demand is that is that formula. We have not been given our percentage change in quantity or percentage change in price. We're going to have to work this out. So percentage change in quantity is going to be an increase of 2,000. So change over original times 100. Our percentage change calculation. So 2,000 over 40,000 * 100 is 5%. An increase in 5%. The price has decreased by two and it was originally 12. So -2 over 12 * 100 is -6.67. And then if we put that into that equation, 5 over -6.67 67 is min -0.3. So their price elasticity demand is minus0.3. That I'm not going to go through too much depth about like what that means elastic or inelastic. There's review videos on this. I'm just focused on the calculation kind of structure here. But it ultimately that is an inelastic um price elasticity demand. It means that when the price changes, demand doesn't change that much. Basically, it changes for every 1% you change your price. Demand only shifts by 0.3%. For the other one, I'm going to show you like a rearranged version. We've been given price losses demand. Product B has a PED of minus0.7. If they increase their price by 3.5, what will their quantity demanded be? So, looking at that triangle, we know that to calculate percentage change in quantity, which is what we're looking for, we need to do price elastics demand times by um percentage change in price. So, that is -0.7 times by 3.5 gives us minus 2.45. Your answer should always be a negative for price losses demand because there's always a negative correlation. Price goes up, demand goes down. Price goes down, demand goes up. Okay, so let's have a look at an example. So this one um says, calculate the difference in price elasticity demand for PlayStation 2 and the Xbox. State your answer to more places. You're advised to show your work. So give this a try and then and then press play when you're ready to have a look at it. So we know our calculation is percentage change in quantity over percentage change in price. In fact, in this situation, they've given us both of those pieces of information. Definitely worth looking at other examples of this kind of question because there's loads of different ways they can ask this and there's loads of different ways they can rearrange the question. This one, the complication, like they're not just going to ask you to calculate it once. They're going to make a complication. Maybe that's you have to work out the percentage change in quantity or percent change in price like we did in those examples. In this situation, you've got to work it out twice and then compare the difference. So, PlayStation 2 is going to be uh quantity over price. So, minus 2.10 over 0.59. That's - 3.65. So, sorry, 3.56. Xbox is -4.47 over 1.47. So, that is - 3.4. So, we need to know the difference between the two. So, - 3.56 - 3.04 is minus 0.52. To to be honest, I actually checked the mark scheme on this one. If you put 0.52 difference, you'd get the four marks as well. So, it doesn't super matter. uh it doesn't seem to super matter if you've got your minuses on that bit but just you know use the answers as you've got the answers. So hopefully that one's pretty straightforward but definitely look at past exam question papers for that. I mentioned how you can do that with the question grid. So for income elasticity demand um the calculation is exactly the same. I know Q before Y isn't like a thing. You just swap the P for a Y basically. The triangle is the same as well. It's just you swap the P for a Y and the meaning is the same. It's how but but instead of it being how much price changes, it's about how much income levels change. So how much the demand of a product changes when income levels change. There's a key difference between income elasticity demand and price elasticity demand. And that we said price last demand was a negative correlation always. So when price goes up, demand goes down. When demand when price goes down, demand goes up. For income elasticity demand, it actually depends on the product. So for example, like certain items, when incomes go up, you'll see more purchases of that. So like a luxury good, for example. But an inferior good when incomes go up you'd actually see a decrease in sales because consumers will move on to maybe a more luxurious or more normal goods. So this one doesn't necessarily have to be pos they're negative all the time. So here's an example. Product is sales decrease from two 300,000 to 290,000 after average incomes dropped by 3%. So average incomes have dropped and demand has dropped. So income is quantity over income and the in the quantity has dropped by 10,000. So that is a percentage change of -3.33. We've been given incomes drop of 3%. So it's going to be minus 3.33 overus 3 gives us a positive income elasticity demand of 1.11. So that would make this a luxury product because it's above one. Uh product B has an income elasticity demand of minus0.7. If income's increased by 2% what will that quantity demanded changed be? So because income elasticity demand is negative that means there's a negative correlation. So our quantity demanded should decrease. But let's check that out. So quantity demand is y times by percentage change in income. So that's going to be minus 0.7 times by 2 is minus 1.4. Probably don't even need a calculator for that one. So hopefully you can see those different um examples. So let's have a look at one from an exam. So this is calculate the income elasticity demand for takeaway meals you advised to show you're working. So we've got the average number of takeaway meals consumed per person per year was 140 is now 144. My median annual income has also gone from 27,000 to 27,195. So quantity, we're gonna have to work these two out. This is one where we only have to do it once, but we have to work it out. So different to our price last as the example. The quantity has increased by four over 140 original times by 100 is an increase of 2.86%. Incomes have increased as well by 195. So that's an increase of 0.72%. So if we put that into the formula, 2.86 86 divided by 0.72 gives us a income assess demand of 3.97. So these are luxury products. This makes sense, right? When you've got more money, you buy more takeaways. Pretty self-explanatory. And actually, you don't need to increase your income by that much to spend more on takeaways. Apparently, proportionally, that's the way it works, right? This is the last one. This hasn't come up on the A level. Uh I'm, as I'm recording this in 2025, so this course has been running for 10 years. We've had eight sets of exams or we're about to have the eighth set of exams. So what we had seven I think um we've never seen this on an AS or an A level paper. However, it has come up in a international A level paper. So I'm going to use that as our example and it's just worth going through. Um just in case I guess like I don't expect it would come up but I can't rule that out. I don't write the exams so I just want to make sure we've covered our bases. It's really straightforward. Market pricing it's the profit per item divided by the cost per item. And it's basically what percentage of the cost per item is made as a profit per item. So that'll make more sense when we do the example. So if a product costs five pounds to make and sells for10, what's the markup? So the profit per item is the selling price minus the cost. So 10 - 5 is £5. And then we just do profit per item divided by cost per item. So 5 profit per item divided by the cost is 100%. So basically there's a 100% markup. You've taken 100% of the cost and you've added it on top to sell the price at £10. So this is the international business example we've seen, right? And it is calculated two decimal places the markup on an Impossible Foods burger. So we've got two burgers here. It talks about the different kind of like um costs involved and um and and and what have you. At the bottom you've got cost per burger and and the average selling price. And you've got this for the beef burger and then the Impossible Foods burger. So give this one a try and then and then have a look at it. So we need this bit, the Impossible Foods burger section. We've got the cost per burger and the selling price. So, we can work out the profit per burger. The selling price is $9.99US 364 gives us a profit per burger of $6.35. So, we do profit per unit over the cost. So, 635 over 365 times by 100 is 174.45%. So, that's the markup. They've basically added 175.45% of the cost on top to get to the selling price. Right, that's them all done. So hopefully that was useful. Um I would as I've mentioned have a look at the the exam question grid that's in the comments. Um I'll also link the theme1 playlist of recaps just in case you want a bit more depth on some of the definitions and the meanings behind these. They'll be covered in a bit more depth in there. But hopefully for the calculations uh this will be useful. Um, I'm obviously at the time of recording I'm yet to do the themes four and the themes two and three ones, but hopefully, you know, depending on when you're watching this, they'll be available as well. If they're not available right now, they are coming. Okay, if you got any questions, chuck them in the comments and I'll do my best to answer them. See you later.