I pointed out to edexcel a few days after the exam the problem with the following question on their A level economics unit 3 paper sat in June 2014. Q1 Dairy Crest Group is a British food producer which uses a large amount of milk in its production processes to make dairy products. In March 2013, Dairy Crest Group bought Proper Welsh Milk, a firm which specialises in selling fresh milk. This takeover could lead to advantages of A horizontal integration B backward vertical integration C forward vertical integration D conglomerate integration E external economies of scale Because of the lack of information about Proper Welsh Milk there is more than one correct answer to this question. It could be B if Proper Welsh Milk is farm that sells milk to Dairy Crest for use in making dairy products. It could be C if Proper Welsh Milk is a distributor of fresh milk to say Welsh consumers and shops. This would have the advantage of easier access to the Welsh market for Dairy Crest. So what does the mark scheme say? ''Correct option B (1 mark) Vertical – at a different stage of the same industry or process of production or same final product (1) Backwards - it is previous/earlier/towards raw materials/away from consumer (1) Reasons or benefits of merger (1+1) e.g. rationalisation Application to the dairy industry (1) e.g. Proper Welsh is a primary industry. Only award the application marks if relevant to backward integration. Knock out examples It cannot be D because conglomerate integration involves merging with a firm in a different industry It cannot be C because forward integration is towards the consumer'' Only one answer B is correct. With reasons such as Proper Welsh is a primary industry which can’t be deduced from the evidence in the question. I have one potential A* student who put C as the correct answer. She could lose her university place by a couple of marks due to this poorly worded question and a lack of flexibility with the answer. I know Colin Leith reads this forum and he did respond to my initial query saying that he will pass on my suggestion but obviously he did not or the examiners did not want to admit an error. Furthermore, the mark scheme states for the following question that the correct answer is D when it should be A: 5 Supermarkets selling freshly baked bread are operating in an oligopoly. They tend to keep prices stable for a popular, frequently compared product, an 800 gram white loaf. One reason for this might be A supermarkets know that the pricing decisions of one supermarket will impact on those of other supermarkets B supermarkets are independent and base their prices on costs alone C there is heavy regulation in the industry to prevent tacit collusion D supermarkets are unable to engage in non-price competition E if prices were cut by one supermarket then the others would leave prices unchanged Mark scheme states the following, so I hope the examiners do not use the same one that is published on the edexcel website. Does anyone know if they do? This has the wrong answer but the correct reasoning! ''Correct Option D (1 mark) Definition of oligopoly e.g. a few firms dominate the market (1) Supermarkets are interdependent (1) Other firms will follow if prices are cut (1) Firms will not follow if prices rise or other asymmetric reaction comments (1) Diagram showing a kinked demand curve with annotation or explanation of inelastic section for downward moving prices or elastic section for upward moving prices (1 +1) – Note kinked demand curve is not required Pay off matrix correctly showing that the firm will not change prices (1 + 1) Application – bread is regularly purchased and therefore easy to spot price changes (1) or often a loss leader (1) Example of a knock out: It’s not C as if it is tacit collusion it has not been controlled by the regulator/competition authorities It’s not D because supermarkets use non price competition such as loyalty cards and customer service schemes.''