Post Utme Bells University 2025 Commerce Question 12

Practice objective / multiple choice question 12 from the 2025 Post Utme Bells University Commerce examination.

Post Utme Bells University 2025 Commerce Objective / Multiple Choice
Question 12 POST_UTME_BELLS_UNIVERSITY • 2025 • COMMERCE • objective

A firm is considering two different production processes for producing a particular good. Process A requires an initial investment of ₦10,000 and has a variable cost of ₦5 per unit produced. Process B requires an initial investment of ₦20,000 and has a variable cost of ₦3 per unit produced. If the firm produces 1,000 units of the good, which production process should it choose?

Answer Options

A. Process A, as it has a lower variable cost per unit produced.
Correct Answer B. Process B, as it has a lower total cost for producing 1,000 units.
C. Process A, as it has a lower initial investment.
D. Process B, as it has a higher initial investment but a lower variable cost per unit produced.
Correct Answer
B
Correct Option:
Process B, as it has a lower total cost for producing 1,000 units.

About This Question

This is Post Utme Bells University 2025 Commerce Question 12. It is one of the objective questions from the 2025 Post Utme Bells University Commerce examination.

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