A number of firms have social welfare as their chief objective. Across the world, the number of such firms is rising. Consumers are also beginning to alter their spending habits by shifting towards environmentally friendly products such as solar energy. Firms that damage the environment are now less able to earn profits, and some of these firms have to merge if they are to survive.
(a)[2]
Identify two examples of social-welfare objectives pursued by firms.
(b)[4]
Explain two kinds of merger.
(c)[6]
Analyse, using a demand and supply diagram, the effects on the solar energy industry of the shift in spending patterns towards environmentally friendly products.
(d)[8]
Discuss if a merger can help a firm survive.
Worked solution & mark scheme
This 20-mark question has a full step-by-step worked solution and mark scheme. One marking point: “Protection of the environment” …