Waec Model Questions Vol1 2023 Economics Question 5

Practice essay / theory question 5 from the 2023 Waec Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Waec Model Questions Vol1 2023 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 WAEC_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • essay

A small manufacturing firm produces widgets. The table below shows the total cost (TC) incurred at different levels of output. | Output (units) | Total Cost (₦) | |----------------|----------------| | 0 | 20,000 | | 100 | 38,000 | | 200 | 54,000 | | 300 | 68,000 | | 400 | 80,000 | | 500 | 90,000 | The market price of a widget is ₦250 per unit.

Question Parts

( a )

Calculate the average total cost (ATC) at each output level (except zero) and comment on the shape of the ATC curve.

( b )

Using the data, estimate the marginal cost (MC) of the 300th unit (i.e., the change in cost when output rises from 200 to 300 units) and discuss how this MC relates to the ATC at that output.

( c )

Determine the output level at which the firm will break even (total revenue equals total cost). Explain the steps and any assumptions you make.

( d )

Based on the above information, discuss whether the firm is likely to be operating in the short‑run or the long‑run and justify your answer with reference to cost concepts.

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About This Question

This is Waec Model Questions Vol1 2023 Economics Question 5. It is one of the essay questions from the 2023 Waec Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

View More Waec Model Questions Vol1 2023 Economics Questions More Waec Model Questions Vol1 Practice Questions Back to Questions

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