A-LevelEconomicsThe price system and the microeconomy9708/32 · Oct/Nov 2017 · Q111 Mark

An industry consists of a dominant firm, which acts as a price leader, and a large number of small firms. Which statement about the profit-maximising output of the small firms is correct? A Average cost is equal to average revenue. B Average cost is minimised. C Marginal cost is equal to price. D Marginal revenue is zero.

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2017). The mark or mark type is shown in brackets.

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Topic: The price system and the microeconomy, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, Oct/Nov 2017 Paper 3 Variant 2, question 11.

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