3.3- Revenues, Costs & Profits- A level Economics Edexcel Exam Questions

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3.3 Revenues, Costs & Profits
Question Paper




Course Edexcel A Level Economics A
Section 3. Business Behaviour & The Labour Market
Topic 3.3 Revenues, Costs & Profits
Difficulty Medium




Time allowed: 70
Score: /54
Percentage: /100




Page 1 of 12

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Question 1a
(a)
The following illustrates the daily average cost curve for a doughnut producer:




Explain what happens to the total cost at output levels greater than Z.
[2 marks]




Question 1b
(b)
At output levels greater than Z, which one of the following correctly identifies what will happen to the cost?
Average fixed cost Average variable cost Marginal cost
A Falls Falls Rises
B Falls Rises Rises
C Rises Rises Falls
D Rises Rises Rises
[1 mark]



Question 1c
(c)
For a luxury doughnut producer the average selling price is £2. The average variable cost is 40% of the selling price and its
fixed cost per day is £300. Calculate total costs per day assuming it produces 400 doughnuts per day.
[1 mark]



Page 2 of 12

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