2025, Set 2, Question 1 · Long · 10 points · about 25 minutes
Desk maker in a competitive market
Draw market and firm graphs at long-run equilibrium, explain whether higher rent changes short-run output, and show a per-unit subsidy's effect and cost on the market graph. Then decide what a binding price floor causes and use cost figures to calculate average cost and classify scale economies.
1 Read the question
The question is College Board's, from the 2025, Set 2 exam. It starts on page 3 of the PDF.
2 Write your answer
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Scoring guidelines (PDF, page 2) What the exam readers saw (Chief Reader report)
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