DP Economics
Question 18N.3.HL.TZ0.b.iii
| Date | November 2018 | Marks available | [Maximum mark: 4] | Reference code | 18N.3.HL.TZ0.b.iii |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | b.iii | Adapted from | N/A |
b.iii.
[Maximum mark: 4]
18N.3.HL.TZ0.b.iii
Firm A produces cartons of coffee. Figure 1 illustrates the firm’s total cost (TC) and variable cost (VC) at different output levels per month.
Figure 1
Figure 2 illustrates the average total cost (ATC), average variable cost (AVC) and marginal cost (MC) at different output levels for Firm B, which produces cans of tea.
Explain why in the short run, as output increases, marginal costs typically decrease and then increase.
[4]
Markscheme
