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Subjects · Leaving Cert Economics

Leaving Cert Economics: Monopoly & price discrimination

How often Monopoly & price discrimination comes up on the Economics papers, every year it was asked, and questions to try.

HL Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

OL Asked on 3 of the last 5 Ordinary Level papers, most recently in 2025. most years

Monopoly & price discrimination, Higher Level(7 marks)

Quick ones on Monopoly & price discrimination.

(a)What lets a monopoly keep supernormal profit in the long run?
  1. Its demand curve is horizontal
  2. Barriers to entry keep rivals out
  3. It produces at minimum average cost
(b)On a monopoly diagram, the marginal revenue curve is…
  1. Above the average revenue curve and flatter
  2. The same line as the average revenue curve
  3. Below the average revenue curve and steeper
(c)On a monopoly diagram, once output Q1 is set where MC = MR, how is the price found?
  1. Read up from Q1 to the AR (demand) curve
  2. Where MR meets the horizontal axis
  3. Where MC cuts AC
Show the answers

(a) Barriers to entry keep rivals out

(b) Below the average revenue curve and steeper

(c) Read up from Q1 to the AR (demand) curve

Your turn: Higher Level questions on Monopoly & price discrimination.

Higher Level

Asked on 5 of the last 5 Higher Level papers, most recently in 2025. banker

Every paper, year by year

YearWhere it came up
2025Q11
2024Q8
2023Q1
2022Q12
2021Q3, Q9

Links open the State Examinations Commission’s paper for that year.

More Monopoly & price discrimination questions

Monopoly & price discrimination, 3 marks

Price discrimination lets a monopolist…

  1. Lower its costs of production
  2. Make the product different for each buyer
  3. Charge more to buyers willing to pay more
Show the answer

Charge more to buyers willing to pay more

By splitting buyers by elasticity and charging each group a different price for the same product, the firm captures more of what consumers are willing to pay.

Monopoly & price discrimination, 3 marks

A profit-maximising monopolist never produces on the inelastic part of its demand curve because there…

  1. Average revenue is rising
  2. Marginal revenue is negative
  3. Marginal cost is zero
Show the answer

Marginal revenue is negative

Where demand is inelastic, cutting price to sell more reduces total revenue, so MR is below zero. MC is positive, so MC = MR can only occur on the elastic part.

Monopoly & price discrimination, 3 marks

Why is a monopoly allocatively inefficient?

  1. Price is set above marginal cost
  2. Price equals marginal cost
  3. It earns only normal profit
Show the answer

Price is set above marginal cost

At P above MC, consumers value an extra unit more than it costs to make, yet the monopolist restricts output. Society would gain from more being produced.

Ordinary Level

Asked on 3 of the last 5 Ordinary Level papers, most recently in 2025. most years

Every paper, year by year

YearWhere it came up
2025Q8
2024Not asked
2023Q4
2022Q11
2021Not asked

Links open the State Examinations Commission’s paper for that year.

More Monopoly & price discrimination questions

Monopoly & price discrimination, 2 marks

A pure monopoly is a market with?

  1. Two sellers
  2. Many small sellers
  3. One seller
Show the answer

One seller

A pure monopoly is a single firm supplying the whole market, with no close substitutes. Barriers to entry keep rivals out.

Monopoly & price discrimination, 2 marks

Which is a barrier to entry that can protect a monopoly?

  1. Perfect information
  2. A patent
  3. Low start-up costs
Show the answer

A patent

A patent gives an inventor the sole legal right to make a product for a number of years. Others cannot copy it, so they cannot enter the market.

Monopoly & price discrimination, 3 marks

In the long run, a monopoly can keep?

  1. Supernormal profit
  2. Only normal profit
  3. A loss
Show the answer

Supernormal profit

Barriers to entry stop new firms coming in to compete the profit away. So a monopolist can earn supernormal profit in the long run as well as the short run.

Other Economics topics

All of Leaving Cert Economics