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A-LevelEconomicsTheory of the Firm / Market StructuresMay/June 2017Paper 3 Q101 Mark

A firm in monopolistic competition that is producing at its profit maximising output is making a loss in the short run. For it to continue in production, what must be correct about its average revenue (AR), marginal revenue (MR) and average variable cost (AVC)?

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About This A-Level Economics Question

This structured question appeared in the Cambridge A-Level Economics (9708) May/June 2017 examination, Paper 3 Variant 2. It tests the topic of Theory of the Firm / Market Structures and is worth 1 mark.

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