DP Economics
Question 20N.3.HL.TZ0.1c.i
| Date | November 2020 | Marks available | [Maximum mark: 1] | Reference code | 20N.3.HL.TZ0.1c.i |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | State | Question number | c.i | Adapted from | N/A |
c.i.
[Maximum mark: 1]
20N.3.HL.TZ0.1c.i
Figure 2 illustrates a perfectly competitive market in equilibrium and a perfectly competitive firm operating in this market. S is supply, D is demand, Po is the short-run equilibrium price, Qo is the short-run equilibrium quantity, MC is marginal cost, ATC is average total cost, AR is average revenue, MR is marginal revenue.
(c.i)
Based on the information in Figure 2, state whether the firms in this market are making normal profits, economic profits or economic losses.
[1]
Markscheme
Economic losses OR losses
is sufficient for [1].
Examiners report
Well answered. candidates recognized that if ATC>P then economic losses are made.
