A-LevelEconomicsGovernment microeconomic intervention9708/33 · Oct/Nov 2019 · Q31 Mark

The production of a good creates a constant marginal external cost at all levels of output. What value of price elasticity of demand for the good will cause the greatest deadweight welfare loss from the externality? A between zero and one B equal to one C greater than one D zero

(a)The production of a good creates a constant marginal external cost at all levels of output. What value of price elasticity of demand for the good will cause the greatest deadweight welfare loss from the externality? A between zero and one B equal to one C greater than one D zero[1]

Mark scheme

Marking points from the official mark scheme (Oct/Nov 2019). The mark or mark type is shown in brackets.

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Topic: Government microeconomic intervention, A-Level Economics (syllabus 9708). Structured question, 1 mark.
Source: A-Level Economics, Oct/Nov 2019 Paper 3 Variant 3, question 3.

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