Gce Model Questions Vol1 2019 Economics Question 44

Practice objective / multiple choice question 44 from the 2019 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2019 Economics Objective / Multiple Choice Medium Difficulty
Question 44 GCE_MODEL_QUESTIONS_VOL1 • 2019 • ECONOMICS • objective

A firm's total cost function is \(TC = 50 + 10Q + 0.2Q^{2}\) (where \(Q\) is output). The market price is constant at £30 per unit.\n\n(a) At what output is average total cost (ATC) minimised?\n(b) What are the break‑even output levels where total revenue equals total cost?\n(c) Does the firm make a profit at the output that minimises ATC?

Answer Options

Correct Answer A. ATC minimum at Q ≈ 15.8 units; break‑even outputs ≈ 2.6 and 97.4 units; profit is made (yes)
B. ATC minimum at Q ≈ 12.5 units; break‑even outputs ≈ 5.0 and 85.0 units; profit is made (yes)
C. ATC minimum at Q ≈ 15.8 units; break‑even outputs ≈ 2.6 and 97.4 units; profit is made (no)
D. ATC minimum at Q ≈ 20.0 units; break‑even outputs ≈ 1.0 and 100.0 units; profit is made (yes)
Correct Answer
A
Correct Option:
ATC minimum at Q ≈ 15.8 units; break‑even outputs ≈ 2.6 and 97.4 units; profit is made (yes)

About This Question

This is Gce Model Questions Vol1 2019 Economics Question 44. It is one of the objective questions from the 2019 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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