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Edexcel A-Level Economics A2 3.3.3 4c Profit Maximising Equilibrium in the Short Run and Long Run Questions

Practise interpreting monopolistic competition diagrams to locate profit maximisation, normal profit and short-run or long-run equilibrium.

Syllabus
First assessment 2019
Course
Economics YEC11
Level
A2

Exam points

  • use MR equals MC on a cost and revenue diagram to identify profit-maximising output
  • interpret long-run equilibrium where tangency brings normal profit but price exceeds MC
  • distinguish short-run supernormal profit from long-run normal profit in a firm diagram

Edexcel A-Level Economics A2 3.3.3 4c Profit Maximising Equilibrium in the Short Run and Long Run Questions question 1

[Maximum number: 1]

The diagram illustrates the profit-maximising output for a street food seller in Taiwan operating in a monopolistically competitive market.

Figure for Question Edexcel A-Level Economics A2 3.3.3 4c Profit Maximising Equilibrium in the Short Run and Long Run Questions question 1 — Edexcel A-Level Economics A2

Which one of the following can be deduced from this information?

A

The street food seller is operating at the short-run equilibrium output

B

The street food seller is operating at the long-run equilibrium output

C

The street food seller is operating at the productively efficient level of output

D

The street food seller is operating at the allocatively efficient level of output

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