DP Economics
Question 20N.3.HL.TZ0.c.iii
| Date | November 2020 | Marks available | [Maximum mark: 2] | Reference code | 20N.3.HL.TZ0.c.iii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | c.iii | Adapted from | N/A |
c.iii.
[Maximum mark: 2]
20N.3.HL.TZ0.c.iii
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.
Using your answer to part (c)(ii), explain how the market adjustment takes place.
[2]
Markscheme
Examiners report
Candidates who chose question one generally had a good understanding of the model and were able to respond accurately. Weaker answers omitted a reference to the price increase.
