A-LevelEconomicsThe price system and the microeconomy9708/42 · May/June 2019 · Q325 Marks
A recent newspaper article commented on the fact that a pharmaceutical company charged customers in the United States (US) US800 per treatment whilst it charged customers in Egypt US80 for the same treatment.
- (a)Explain why the company might follow this policy and what conditions are necessary to allow the policy to be successful.[12]
- (b)Discuss whether oligopolistic industries always operate against the interests of consumers.[13]
Mark scheme
Marking points from the official mark scheme (May/June 2019). The mark or mark type is shown in brackets.
- [12] (a) An explanation of price discrimination – marginal revenue (MR) differs between markets with the same marginal cost (MC). Explanation of the conditions necessary for its successful implementation, price maker, barriers between markets and differing price elasticity of demand.
- [13] (b) Oligopoly behaviours e.g. collusion, price fixing, barriers to entry preventing competition. But benefits for consumers, e.g. new product development, economies of scale, price discrimination, price wars.
Write your answer and get it marked
On Oracle Prep you can write or photograph your own answer and have it marked by AI against this mark scheme, with feedback on what you missed.
Sign up free →