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Pearson Edexcel Level 3 GCE Advanced PAPER 1 Markets and how they work June 2023
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Pearson Edexcel Level 3 GCE Advanced PAPER 1 Markets and how they work june 2023
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Please check the examination details below before entering yourcandidate information
Candidate surnameOther names
Centre Number Candidate Number
Pearson Edexcel Level 3 GCE
Thursday 18 May 2023
9EB0/01
Paper
Morning (Time: 2 hours)
reference
Economics B
Advanced
PAPER 1: Markets and how they work
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SECTION A
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Read the following extracts (A–E) before answering
Question 1.
Write your answers in the spaces provided.
Extrac
tA
Competition watchdog to review UK music industry over power of big firms
The competition watchdog, the Competition and Markets Authority
(CMA), is launching a review of the UK music industry. This will address
concerns about the power of big music firms and ensure that the music
industry is competitive, thriving and works in the
interests of the consumer. 5
Andrea Coscelli, chief executive of the CMA, said: “Over the past decade,
the music industry has evolved almost beyond recognition, with
streaming now accounting for more than 80% of all music listened to in
the UK. Whether you are into Bowie, Beethoven or Beyoncé, most of us
now choose to stream our favourite music. A market study will
help us to understand these radical changes and build a view as to whether competition 10
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in this industry is working well or whether further action needs to be taken.”
Music firms have argued that competition remains fierce in the UK music
industry, which has produced global artists such as Adele, Ed Sheeran
and Coldplay, while many lesser known British artists are thriving in the
streaming age.
The rise of streaming platforms, such as Spotify and Apple Music, has triggered an 15
international debate over who benefits from the money generated by
the boom in digital music.
(Source: adapted from https://www.ft.com/content/1399b213-df27-46a5-902b-
41842a1cab8b/)
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, Extract B
Selected financial information for Spotify for the year end 30
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December 2020 and 2021
202 202
1 0
(€m (€m
) )
Revenue 9 668 7 880
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Gross profit 2 591 2 015
Operating profit/(loss) 94 (293)
Research and development 912 837
(R&D)
(Source: adapted from https://investors.spotify.com/financials/default.aspx)
Extract
C
Spotify’s pricing structure
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Spotify is a music streaming platform that gives users access to a large
catalogue of music. It offers two types of access: a basic free service,
known as ‘freemium’ with advertisements and an unlimited premium
service without advertisements for a
subscription fee. 5
The premium version of Spotify offers uninterrupted access to music
across all devices, including smartphones, tablets and televisions. The
premium version enables downloading of songs to devices for offline
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listening and high-quality audio.
The premium version is available at varying monthly subscription fees as follows:
• Students £5.99 10
• Individuals £9.99
• Couples £13.99
• Family £16.99.
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(Source: adapted from https://insights.daffodilsw.com/blog/how-spotify-works-business-
model-and-revenue-streams)
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, Extract D
This Is Music 2021 Report
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This Is Music is the annual economic study by UK Music and its members. In 2021 it found:
2019 2020
Number employed in the music 197,000 128,000
industry
5
Music industry’s economic £5.8bn £3.1bn
contribution
Music exports £2.9bn £2.3bn
Glastonbury was among hundreds of festivals and live music events
cancelled after restrictions were imposed in March 2020. The impact was
felt right across the industry as studios and venues were forced to close,
and musicians and crew were unable to work.
In an industry where three-quarters are self-employed, many were not covered by 10
government support schemes. This resulted in thousands of music
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creators, crew and others leaving the industry.
UK Music is calling on the UK Government to implement tax incentives for
the music industry to stimulate growth and jobs. This includes a reduction
in value added tax (VAT)
on tickets for live music events. 15
(Source: adapted from https://www.ukmusic.org/research-reports/this-is-music-2021/)
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