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Question 19M.1.HL.TZ2.a

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Date May 2019 Marks available [Maximum mark: 10] Reference code 19M.1.HL.TZ2.a
Level HL Paper 1 Time zone TZ2
Command term Explain Question number a Adapted from N/A
a.
[Maximum mark: 10]
19M.1.HL.TZ2.a

Explain why monopoly power may be considered a type of market failure.

[10]

Markscheme

Marks should be allocated according to the paper 1 markbands for May 2013 forward, part A.

Answers may include:

  • definition of monopoly power, market failure
  • diagram to show deadweight loss under monopoly
  • explanation that market failure in this case is a form of welfare loss, illustrated by productive and allocative inefficiency
  • examples of monopoly.
Examiners report

This was usually well attempted though lower achieving responses did not successfully identify the market failure that was the point of the question. Some candidates provided a general description of the faults of monopoly with inadequate regard for what was asked. The highest achieving responses focused on allocative inefficiency and identified that as market failure.

Syllabus sections