Gce Model Questions Vol1 2020 Economics Question 5

Practice essay / theory question 5 from the 2020 Gce Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Gce Model Questions Vol1 2020 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 GCE_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • essay

A textile firm produces shirts. The table below shows its total cost (TC) and total revenue (TR) at various levels of output. | Output (units) | TC (₦) | TR (₦) | |----------------|--------|--------| | 0 | 200,000| 0 | | 100 | 260,000| 300,000| | 200 | 340,000| 560,000| | 300 | 440,000| 780,000| | 400 | 560,000| 960,000| | 500 | 700,000| 1,100,000|

Question Parts

( a )

Calculate the average cost (AC) and average revenue (AR) for each output level shown in the table.

( b )

Determine the output at which the firm breaks even (i.e., where total revenue equals total cost). Show the method you use and state the approximate break‑even output.

( c )

Using the concept of marginal cost (MC), discuss whether the firm should increase output beyond the break‑even point. Include:

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About This Question

This is Gce Model Questions Vol1 2020 Economics Question 5. It is one of the essay questions from the 2020 Gce Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

View More Gce Model Questions Vol1 2020 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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