Question 20N.3.HL.TZ0.1b.ii
| Date | November 2020 | Marks available | [Maximum mark: 2] | Reference code | 20N.3.HL.TZ0.1b.ii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Calculate | Question number | b.ii | Adapted from | N/A |
Firm A, which is operating in a perfectly competitive market, produces almonds. Figure 1 illustrates Firm A’s average total cost (ATC), average variable cost (AVC) and marginal cost (MC) curves at different output levels.
Calculate the economic profit/loss when Firm A is producing at the output level identified in part (b)(i).
[2]
21 (11− 28)
Any valid working is sufficient for [1].
= − $357 OR (economic) losses = $357
OFR applies if incorrect quantity is given for (b)(i).
An answer of a loss of $357 or −357 without workings is sufficient for [1].
For full marks to be awarded, the response must provide valid working and include correct units. However, superfluous units may be ignored.
Stronger candidates were able to perform the calculation using an accurate reading from the graph. However, there was some tendency to mix the price with AVC or to revert to the quantity which had been selected for part (a).
