Gce Model Questions Vol1 2018 Economics Question 35

Practice objective / multiple choice question 35 from the 2018 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2018 Economics Objective / Multiple Choice Medium Difficulty
Question 35 GCE_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

A firm in a monopolistically competitive market faces the demand curve \(P = 200 - 4Q\). Its total cost function is \(TC = 50 + 20Q + 2Q^{2}\). (a) Determine the profit‑maximising output and price, and calculate the profit. (b) Under perfect competition the firm would produce where price equals marginal cost. Find the competitive output and price. (c) Compute the dead‑weight loss associated with the monopoly compared with perfect competition.

Answer Options

Correct Answer A. a) Q=15, P=\(\text{₦}140\), profit=\(\text{₦}1{,}300\); b) Q=22.5, P=\(\text{₦}110\); c) dead‑weight loss = \(\text{₦}225\)
B. a) Q=14, P=\(\text{₦}144\), profit=\(\text{₦}1{,}250\); b) Q=21, P=\(\text{₦}115\); c) dead‑weight loss = \(\text{₦}230\)
C. a) Q=16, P=\(\text{₦}136\), profit=\(\text{₦}1{,}350\); b) Q=24, P=\(\text{₦}100\); c) dead‑weight loss = \(\text{₦}200\)
D. a) Q=12, P=\(\text{₦}152\), profit=\(\text{₦}1{,}200\); b) Q=20, P=\(\text{₦}120\); c) dead‑weight loss = \(\text{₦}250\)
Correct Answer
A
Correct Option:
a) Q=15, P=\(\text{₦}140\), profit=\(\text{₦}1{,}300\); b) Q=22.5, P=\(\text{₦}110\); c) dead‑weight loss = \(\text{₦}225\)

About This Question

This is Gce Model Questions Vol1 2018 Economics Question 35. It is one of the objective questions from the 2018 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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