Waec Model Questions Vol1 2024 Economics Question 5

Practice essay / theory question 5 from the 2024 Waec Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Waec Model Questions Vol1 2024 Economics Essay / Theory
Topic: Cost and Revenue
Question 5 WAEC_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • essay

A small manufacturing firm produces wooden chairs. The firm’s total cost (TC) in Naira for producing Q chairs can be expressed as TC = a + bQ + cQ², where a, b and c are constants. The following information is known: - When the firm produces 0 chairs, its total cost is ₦120,000 (fixed cost). - The average total cost (ATC) of producing 100 chairs is ₦2,500 per chair. - The marginal cost (MC) of the 101st chair is ₦3,200. Answer the questions that follow.

Question Parts

( a )
Determine the numerical values of the constants a, b and c.
( b )
Using the cost function obtained, calculate the output level at which the firm breaks even if the market price per chair is ₦3,000.
( c )
Discuss two possible reasons why the firm might choose not to produce at the break‑even output even though it would cover all costs.

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About This Question

This is Waec Model Questions Vol1 2024 Economics Question 5. It is one of the essay questions from the 2024 Waec Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

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