9708/42/O/N/22  

• Explain the law of diminishing returns and its relevance to the shapes of the marginal cost curve and the average variable cost curve of a firm. [12] 

9708/43/O/N/21 

‘In large firms the long-run average cost falls as output increases and consumers benefit from lower prices. In small firms it does not. There is, therefore, no place in a modern economy for small firms.’ Do you agree with these statements? [13] 

9708/42/O/N/21 

• Explain the link between diminishing marginal returns and the shape of a firm’s short-run marginal cost curve and short-run average total cost curve. [12] 

9708/42/M/J/21 

• Discuss the relative importance of marginal cost and average variable cost in determining short-run production decisions. [13]