Waec Model Questions Vol1 2021 Economics Question 4

Practice objective / multiple choice question 4 from the 2021 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 4 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

A firm sells a product for ₦250 per unit. Its fixed cost is ₦2,000,000 per year and its variable cost per unit is currently ₦150. Due to inflation, the variable cost is expected to rise by 15 % after six months, while the selling price remains unchanged.\n\n(a) Calculate the break‑even output (in units) before the cost increase.\n(b) Calculate the break‑even output after the variable cost rises.\n(c) By what percentage does the break‑even output increase as a result of the cost rise? Round the percentage to the nearest whole number.

Answer Options

A. Break‑even before rise: 20,000 units; after rise: 27,500 units; increase: 38 %
B. Break‑even before rise: 18,000 units; after rise: 25,000 units; increase: 39 %
C. Break‑even before rise: 20,000 units; after rise: 24,000 units; increase: 20 %
Correct Answer D. Break‑even before rise: 20,000 units; after rise: 25,807 units; increase: 29 %
Correct Answer
D
Correct Option:
Break‑even before rise: 20,000 units; after rise: 25,807 units; increase: 29 %

About This Question

This is Waec Model Questions Vol1 2021 Economics Question 4. It is one of the objective questions from the 2021 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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