Question 22N.3.HL.TZ0.1a.ii
| Date | November 2022 | Marks available | [Maximum mark: 2] | Reference code | 22N.3.HL.TZ0.1a.ii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Sketch | Question number | a.ii | Adapted from | N/A |
“Best Meals” is one of many small catering companies, each of which prepares a variety of different meals for airlines in Country X. Table 1 shows the costs of production in US dollars (US$) on a per hour basis for “Best Meals”.
Table 1
Assuming that this catering market is in long-run equilibrium, sketch a diagram in which the profit-maximizing level of output for a firm in this market is shown.
[2]
For a negatively sloped D (AR) tangential to AC [1]
For the point of tangency being vertically above the profit maximizing output where MR and MC intersect [1]
A response with missing or incorrect labels or without MC intersecting minimum AC may be awarded a maximum of [1]
The vertical axis may be labelled Cost (C), Price (P) or Revenue (R). The horizontal axis may be labelled Quantity (Q) or Output. AC may be labelled ATC. A title is not necessary.
This part was generally done poorly. A significant number of candidates did not identify the market structure as one of monopolistic competition. The phrase "prepares a variety of different meals" indicated that products were not identical. Furthermore, candidates generally found difficulty in sketching an appropriate diagram with the ATC curve tangential to the AD curve at a level of output where MR = MC.
