A-LevelEconomicsThe price system and the microeconomy9708/32 · Feb/Mar 2017 · Q51 Mark

The diagram shows the position of a profit-maximising firm in a perfectly competitive industry. [Figure showing price/cost vs output, MC, AC, AR=MR curves, and a point representing profit-maximising position]

(a)What is the correct analysis of this position? profits in short run number of firms in the industry in the long run A supernormal decrease B supernormal increase C normal remain the same D subnormal decrease[1]

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Marking points from the official mark scheme (Feb/Mar 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, Feb/Mar 2017 Paper 3 Variant 2, question 5.

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