Cambridge International (CAIE) · 7 The price system and the microeconomy (A Level) · 7.5 Types of cost, revenue and profit, short-run and long-run production

Cambridge International (CAIE) Economics past paper questions: Types of cost, revenue and profit, short-run and long-run production

Every Cambridge International (CAIE) question on Types of cost, revenue and profit, short-run and long-run production from 2023 to 2025: 2 data response questions and 10 multiple choice questions. It covers 7.8 Differing objectives and policies of firms and 7.3 Efficiency and market failure. Each question links to its paper, mark scheme and examiner report.

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Subtopics7.8 Differing objectives and policies of firms 17.3 Efficiency and market failure 1

Data response questions on types of cost, revenue and profit, short-run and long-run production

Multiple choice questions

  1. A-level Paper 3, June 2025, Q5

    The diagrams show four average cost curves. Which diagram illustrates diseconomies of scale?

  2. A-level Paper 3, March 2025, Q1

    Which cost will continually decrease as a firm’s output increases in the short run?

  3. A-level Paper 3, November 2024, Q3

    Diagrams 1 and 2 show different long-run average cost curves (LRAC). Which situations do the two diagrams show?

  4. A-level Paper 3, November 2024, Q6

    The diagram shows a profit maximising firm in equilibrium. What would happen to the firm’s price, output and profit if there was an increase in its fixed costs?

  5. A-level Paper 3, June 2024, Q4

    A firm increases its output, starting from zero. How will this affect its short-run marginal cost (MC), average total cost (ATC) and average fixed cost (AFC)?

  6. A-level Paper 3, March 2024, Q4

    The statement and the table provide information about a production function. Which words correctly complete gaps 1, 2 and 3?

  7. A-level Paper 3, June 2023, Q4

    The diagram shows the cost curves of a firm. What is the level of output below which the firm will shut down in the long run?

  8. A-level Paper 3, June 2023, Q5

    Steel producer X takes over its main competitor, steel producer Y. What would X expect to happen to the average revenue for its product and its long-run average cost as a result of this takeover?

  9. A-level Paper 3, June 2023, Q11

    The table shows how a firm’s total cost changes as more workers are employed. What would be the effect of employing a third worker on the firm’s average costs and its marginal costs?

  10. A-level Paper 3, June 2023, Q14

    The production schedule indicates how total output increases as up to five workers are employed per week. What is the marginal product when the average product per worker equals 7.0 units?

Question text is quoted from the question papers, © Cambridge University Press & Assessment (UCLES), for students’ private study. Open the official papers and mark schemes from the links on each question. Examiner insights are written with AI assistance and moderated by Finn.