Gce Model Questions Vol1 2017 Economics Question 5

Practice essay / theory question 5 from the 2017 Gce Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Gce Model Questions Vol1 2017 Economics Essay / Theory
Topic: Cost and Revenue
Question 5 GCE_MODEL_QUESTIONS_VOL1 • 2017 • ECONOMICS • essay

A small manufacturing firm produces hand‑crafted wooden chairs. The following information is available for a typical month. Output (units) | Total Cost (₦) | Total Revenue (₦) --- | --- | --- 0 | 20,000 | 0 100 | 45,000 | 55,000 200 | 70,000 | 100,000 300 | 100,000 | 135,000 400 | 140,000 | 160,000

Question Parts

( a )
Calculate the average total cost (ATC) and average total revenue (ATR) at an output of 300 units. Comment on the firm’s profitability at that output.
( b )
Estimate the marginal cost of the 300th unit using the data provided. Explain the method you used.
( c )
Using the data, determine the output level at which the firm makes the maximum profit within the range given. Show your reasoning.
( d )
Discuss two ways in which the firm could achieve lower average costs in the long run. Relate your discussion to the concepts of economies of scale and technical progress.

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About This Question

This is Gce Model Questions Vol1 2017 Economics Question 5. It is one of the essay questions from the 2017 Gce Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

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

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