Gce Model Questions Vol1 2017 Economics Question 4

Practice essay / theory question 4 from the 2017 Gce Model Questions Vol1 Economics examination. This question covers Production .

Gce Model Questions Vol1 2017 Economics Essay / Theory

Topic: Production

Question 4 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • essay

A small manufacturing firm produces wooden chairs. The short‑run total cost (TC) function is TC = 200 + 5Q + 0.1Q², where Q is output (units per month). The firm sells each chair at a constant market price of ₦150.

Question Parts

( a )

Derive the short‑run marginal cost (SMC) and average total cost (ATC) functions.

( b )

Determine the level of output at which the firm should produce to maximise profit, or explain why it should shut down.

( c )

Calculate the profit (or loss) at that output level.

( d )

Discuss how the firm’s decision would change in the long run if the market price fell to ₦120.

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About This Question

This is Gce Model Questions Vol1 2017 Economics Question 4. It is one of the essay questions from the 2017 Gce Model Questions Vol1 Economics examination.

The question covers Production .

View More Gce Model Questions Vol1 2017 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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