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7 marksTheory of Supply

CAPE Economics Unit 1 · 2014 · Paper 2 · Question 3(a)(i)

A shoe manufacturer's output levels, total cost, total revenue, and marginal revenue are presented in a table.

Copy and complete the table to show marginal cost and average cost for each level of output.

This question uses a figure or table from the paper — you'll see it when you practise.

The mark scheme is shown once you've answered.

Practise this question

Other parts of this question

  1. 3(a)(ii)Use the completed table from (a)(i) to plot marginal cost, marginal revenue, and average cost curves on the same diagram.[5 marks]
  2. 3(b)(i)With the aid of an example, explain the relationship between the marginal cost curve and the average cost curve.[5 marks]
  3. 3(b)(ii)Identify the market structure under which the firm operates, justifying your answer.[3 marks]
  4. 3(c)Analyse how a specific characteristic of perfect competition guarantees that, in the long run, perfectly competitive firms earn zero economic profits.[5 marks]

More practice: the rest of this paper · more Theory of Supply questions · all CAPE Economics Unit 1 past papers