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Question 19N.1.HL.TZ0.a

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Date November 2019 Marks available [Maximum mark: 10] Reference code 19N.1.HL.TZ0.a
Level HL Paper 1 Time zone TZ0
Command term Explain Question number a Adapted from N/A
a.
[Maximum mark: 10]
19N.1.HL.TZ0.a

Explain how two types of economies of scale can lead to a fall in long-run average costs.

[10]

Markscheme

PLEASE NOTE: This question part is not on the syllabus for first teaching 2020/first exams 2022.

 

Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.

Answers may include:

  • definitions of economies of scale, long-run average costs
  • diagram to show movement along the downward-sloping portion of the long-run average cost curve
  • explanation of how economies of scale lead to lower average costs as a firm increases scale of production in the long run that refers to two clearly different types of economies of scale, such as specialization, efficiency, marketing and indivisibilities
  • examples of specific firms (or industries) that have possibly experienced falling long-run average costs in practice because of economies of scale.

Syllabus sections