2024

AP Microeconomics
®

Sample Student Responses

and Scoring Commentary
Set 2

Inside:

Free-Response Question 1
☑ Scoring Guidelines
☑ Student Samples
☑ Scoring Commentary

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AP® Microeconomics 2024 Scoring Guidelines

Question 1: Long 10 points

(a) Draw a correctly labeled graph of Arzeye Pharma with a downward-sloping demand (D) 1 point
curve and a downward-sloping marginal revenue (MR) curve with the MR curve below
the D curve.

For the second point, the graph must show a rising marginal cost (MC) curve and the 1 point
profit-maximizing quantity, labeled Q*, where MR = MC.

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AP® Microeconomics 2024 Scoring Guidelines
For the third point, the graph must show the profit-maximizing price, labeled P*, from the 1 point
downward-sloping demand curve at Q*.

For the fourth point, the graph must show the average total cost (ATC) curve below P* at 1 point
Q* and the marginal cost curve passing through the minimum point of the ATC curve.

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AP® Microeconomics 2024 Scoring Guidelines
For the fifth point, the graph must show the area of consumer surplus, shaded 1 point
completely.

Total for part (a) 5 points

(b) (i) The graph from part (a) must show the quantity that maximizes total revenue, labeled QR, 1 point
where marginal revenue equals 0.

(ii) State that demand is unit elastic. 1 point

Total for part (b) 2 points

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AP® Microeconomics 2024 Scoring Guidelines
(c) (i) The graph from part (a) must show the lowest price that Arzeye Pharma would charge if it 1 point
engaged in perfect price discrimination, labeled P2, from the intersection of the demand
and marginal cost curves.

(ii) State that consumer surplus would decrease to $0 and explain that Arzeye is able to 1 point
charge the maximum price each consumer is willing to pay.
Total for part (c) 2 points

(d) State that Arzeye Pharma’s demand will become more elastic and explain that as the 1 point
patent expires more firms will enter the market which increases the number and
availability of substitutes, causing consumers to be more responsive to changes in the
price of eye treatments.
Total for question 1 10 points

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Question 1 Sample A Page 1 of 1
Question 1 Sample B Page 1 of 1
Question 1 Sample C Page 1 of 1
AP® Microeconomics 2024 Scoring Commentary

Question 1

Note: Student samples are quoted verbatim and may contain spelling and grammatical errors.

Overview

The question assessed students’ understanding of how a monopoly could maximize profits, how
instead it could maximize revenue, the relationship between marginal revenue and elasticity, and the
effects of price discrimination on consumer surplus. The question also assessed students’
understanding of how a loss of barriers to entry would affect the elasticity of demand.

The question stated that “Arzeye Pharma has a patent, a legal barrier to entry, on its newly
developed eye treatment that cures common eye problems. Arzeye Pharma is currently earning
positive economic profits and is producing the profit–maximizing quantity of eye treatments.”

In part (a) students were asked to draw a correctly labeled graph for a monopoly earning positive
economic profit. Parts (a)(i) and (a)(ii) asked students to show the profit-maximizing quantity and
price, respectively. The question tested students’ knowledge of market conditions for a monopoly
and their ability to illustrate these concepts using a graph. This task required demonstrating
knowledge of revenue and cost conditions by drawing a downward-sloping demand curve (D), a
downward-sloping marginal revenue curve (MR) that lies below the demand curve, and by drawing
the marginal cost (MC) curve. Students were required to show that the profit-maximizing quantity
(Q*) occurs where MR equals MC and that the profit-maximizing price (P*) is determined by
identifying the price that corresponds to this quantity on the D curve. These tasks required students
to demonstrate marginal analysis in a graphical format. Part (a)(iii) asked students to draw the
average total cost (ATC) curve consistent with the given positive economic profit condition by
having the ATC curve below P* at Q* and with the rising MC curve passing through the minimum
point of the ATC curve. Part (a)(iv) asked students to completely shade the area of consumer surplus
(CS). This task required students to demonstrate their understanding that CS is value net of the price
paid for the consumers who purchase the good, and so corresponds to the area that lies below the D
curve down to P* and over to Q*.

Part (b) of this question redirected students to consider that Arzeye Pharma wanted to charge a price
that maximized total revenue instead of maximizing profit. Part (b)(i) asked students to label on their
graphs in part (a) the revenue-maximizing quantity labeled as QR. This task required students to
demonstrate knowledge that the revenue-maximizing quantity is located where MR=0. Part (b)(ii)
asked students to determine whether demand at their labeled QR was elastic, inelastic, or unit elastic.
This task required students to demonstrate their understanding of the relationship between marginal
revenue and elasticity by stating that the demand at QR was unit elastic.

Part (c) of this question redirected students to consider that Arzeye Pharma engaged in perfect price
discrimination. In part (c)(i) students were asked to label on their graphs in part (a) the lowest price
the firm would charge as P2. This task required students to understand that the lowest price a
perfectly price discriminating monopolist charges is from where D=MC, similar to the P=MC
condition in a perfectly competitive market. In part (c)(ii) students were asked to determine that CS
would decrease to zero and explain that the monopolist would charge the maximum price each
consumer is willing to pay. This task tested their understanding that a perfectly price discriminating
monopolist extracts all economic surplus.

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AP® Microeconomics 2024 Scoring Commentary

Question 1 (continued)

Part (d) redirected students by stating that Arzeye Pharma’s patent had expired. Students were asked
to conclude the demand would become more elastic since new firms would enter the market and
provide substitutes. This part of the question assessed students’ understanding that a change in the
availability of substitutes would increase consumers’ sensitivity to a change in price.

Sample: 1A
Score: 10

Part (a): 5 points

The response earned the first point in part (a) because the response shows a downward-sloping
demand (D) curve and a downward-sloping marginal revenue (MR) curve with the MR curve below
the D curve. The response earned the second point in part (a) because the response shows a rising
marginal cost (MC) curve and the profit-maximizing quantity, labeled Q*, where MR=MC. The
response earned the third point in part (a) because the response shows the profit-maximizing price,
labeled P*, from the downward-sloping demand curve at Q*. The response earned the fourth point in
part (a) because the response shows the average total cost curve below P* at Q* and the MC curve
intersecting average total cost at its minimum point. The response earned the fifth point in part (a)
because the response shows the area of consumer surplus shaded completely.

Part (b): 2 points

The response earned the first point in part (b) because the response shows the quantity that
maximizes total revenue, labeled QR, where MR=0. The response earned the second point in part (b)
because the response correctly states demand is unit elastic.

Part (c): 2 points

The response earned the first point in part (c) because the response shows P2 from the intersection of
the demand and marginal cost curves. The response earned the second point in part (c) because the
response states consumer surplus would decrease to zero and correctly explains that “…every
consumer pays the most amount they are willing to...”.

Part (d): 1 point

The response earned the point in part (d) because the response asserts demand will become more
elastic and correctly explains that firms will enter the industry, and there will be more substitutes
available for consumers.

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AP® Microeconomics 2024 Scoring Commentary

Question 1 (continued)

Sample: 1B
Score: 6

Part (a): 5 points

The response earned the first point in part (a) because the response shows a downward-sloping
demand (D) curve and a downward-sloping marginal revenue (MR) curve with the MR curve below
the D curve. The response earned the second point in part (a) because the response shows a rising
marginal cost (MC) curve and the profit-maximizing quantity, labeled Q*, where MR = MC. The
response earned the third point in part (a) because the response shows the profit-maximizing price,
labeled P*, from the downward-sloping demand curve at Q*. The response earned the fourth point in
part (a) because the response shows the average total cost curve below P* at Q* and the MC curve
intersecting average total cost at its minimum point. The response earned the fifth point in part (a)
because the response shows the area of consumer surplus shaded completely.

Part (b): 2 points

The response earned the first point in part (b) because the response shows the quantity that
maximizes total revenue, labeled QR, where MR=0. The response did not earn the second point in
part (b) because the response incorrectly states demand is inelastic.

Part (c): 2 points

The response did not earn the first point in part (c) because the response incorrectly shows P2 from
the intersection of the marginal revenue and marginal cost curves. The response did not earn the
second point in part (c) because the response incorrectly states consumer surplus increases.

Part (d): 1 point

The response did not earn the point in part (d) because the response does not explain that demand
will become more elastic since firms will enter the market and more substitutes are available.

Sample: 1C
Score: 4

Part (a): 5 points

The response earned the first point in part (a) because the response shows a downward-sloping
demand (D) curve and a downward-sloping marginal revenue (MR) curve with the MR curve below
the D curve. The response earned the second point in part (a) because the response shows a rising
marginal cost (MC) curve and the profit-maximizing quantity, labeled Q*, where MR = MC. The
response earned the third point in part (a) because the response shows the profit-maximizing price,
labeled P*, from the downward-sloping demand curve at Q*. The response did not earn the fourth
point in part (a) because the response does not show the MC curve intersecting the average total cost
curve at its minimum point. The response earned the fifth point in part (a) because the response
shows the area of consumer surplus shaded completely.
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AP® Microeconomics 2024 Scoring Commentary

Question 1 (continued)

Part (b): 2 points

The response did not earn the first point in part (b) because the response incorrectly shows the
quantity that maximizes total revenue, labeled QR, from the intersection of the demand and average
total cost curves. The response did not earn the second point in part (b) because the response
incorrectly states demand is elastic.

Part (c): 2 points

The response did not earn the first point in part (c) because the response incorrectly shows P2 from
the intersection of the demand and average total cost curves. The response did not earn the second
point in part (c) because the response incorrectly states consumer surplus will increase.

Part (d): 1 point

The response did not earn the point in part (d) because the response does not correctly explain why
the demand for eye treatments will become more elastic.

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