Waec Model Questions Vol1 2021 Economics Question 5

Practice essay / theory question 5 from the 2021 Waec Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Waec Model Questions Vol1 2021 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 WAEC_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • essay

A small manufacturing firm produces a single product. Its total cost (TC) function is TC = 200 + 5Q + 0.02Q², where Q is output in units. The market demand for the product is represented by the inverse demand curve P = 120 – 0.5Q. The firm is a price‑taker and therefore its total revenue (TR) is TR = P·Q. Answer the following:

Question Parts

( a )

Derive the expressions for marginal cost (MC) and marginal revenue (MR).

( b )

Determine the output level that maximises profit and state the corresponding price.

( c )

Calculate the maximum profit the firm can earn.

( d )

The government introduces a specific tax of ₦10 per unit produced. Explain how the profit‑maximising output changes and recompute the new profit level.

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About This Question

This is Waec Model Questions Vol1 2021 Economics Question 5. It is one of the essay questions from the 2021 Waec Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

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