Practise IB Economics HL 2.11.4 by analysing monopoly diagrams, pricing, welfare loss, barriers to entry, natural monopoly and efficiency with marked exam evidence.
Explain how welfare loss may result from monopoly power.
Answers may include:
- definitions of welfare loss, monopoly power, allocative efficiency market failure
- theory of the firm: monopoly market structure explaining how price is higher and output lower due to barriers to entry, allowing loss of productive and allocative efficiency at profit maximising output
- diagram to show the above, highlighting welfare (deadweight) loss under monopoly
- examples of welfare loss under monopoly.
Assessment Criteria
Part (a) 10 marks
Level Marks
0 The work does not reach a standard described by the descriptors below. ..... 0
1 There is little understanding of the specific demands of the question. Relevant economic terms are not defined.
There is very little knowledge of relevant economic theory. There are significant errors. ..... 1-3
2 There is some understanding of the specific demands of the question. Some relevant economic terms are defined.
There is some knowledge of relevant economic theory.
There are some errors. ..... 4-6
3 There is understanding of the specific demands of the question.
Relevant economic terms are defined.
Relevant economic theory is explained and applied.
Where appropriate, diagrams are included and applied.
Where appropriate, examples are used.
There are few errors. ..... 7-8
4 There is clear understanding of the specific demands of the question. Relevant economic terms are clearly defined.
Relevant economic theory is clearly explained and applied.
Where appropriate, diagrams are included and applied effectively. Where appropriate, examples are used effectively. There are no significant errors. ..... 9-10