DP Economics
Question 18N.3.HL.TZ0.f
| Date | November 2018 | Marks available | [Maximum mark: 2] | Reference code | 18N.3.HL.TZ0.f |
| Level | HL | Paper | 3 | Time zone | TZ0 |
| Command term | Explain | Question number | f | Adapted from | N/A |
f.
[Maximum mark: 2]
18N.3.HL.TZ0.f
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.
The price of tea in the perfectly competitive tea market is presently $21 per can.
Firm B and all the other firms in the tea market begin to sell their tea in distinctive packages and many differentiate their product with organic tea or fruit flavours. Explain how the demand curve faced by Firm B will change as a result.
[2]
Markscheme
