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IB Economics HL 2.11.6 Hl Monopolistic Competition Questions

Practise 2.11.6 (HL) Monopolistic competition in IB Economics HL by reviewing the concepts and applying them to marked questions.

Syllabus
First assessment 2022
Course
Economics HL
Level
HL

Exam points

  • Monopolistically competitive firms maximize profit in the short run and long run
  • Many substitutes make demand more elastic than monopoly demand
  • Monopolistic competition is allocatively inefficient but offers more product variety and less inefficiency than monopoly
  • Diagram: monopolistically competitive firm showing abnormal profit, normal profit, and losses
  • Diagram: monopolistic competition with more elastic demand than monopoly

Learn this topic

Study 2.11.6 (HL)—Monopolistic competition conceptsOpen the corresponding Concept lesson for explanations, examples and exam connections.

IB Economics HL 2.11.6 Hl Monopolistic Competition Questions question 1

[Maximum number: 2]

Firm A produces cartons of coffee. Figure 1 illustrates the firm's total cost (TC) and variable cost (VC) at different output levels per month.

Figure 1

Figure 1

Firm B and all the other firms in the tea market begin to sell their tea in distinctive packages and many differentiate their product with organic tea or fruit flavours. Explain how the demand curve faced by Firm B will change as a result.

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