Gce Model Questions Vol1 2021 Economics Question 50
Practice objective / multiple choice question 50 from the 2021 Gce Model Questions Vol1 Economics examination.
An automobile producer has total cost \( TC = 5{,}000 + 20Q + 0.1Q^{2} \) where \(Q\) is the number of cars produced. The market price is constant at \$80 per car (perfect competition). The firm can adopt a new technology that changes the variable cost coefficients to 15 and 0.05 respectively, but requires an additional fixed cost of \$2,000. Determine: (a) the profit‑maximising output and profit with the current technology, (b) the profit‑maximising output and profit after adopting the new technology, and (c) should the firm adopt the technology? Assume output can be fractional.
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About This Question
This is Gce Model Questions Vol1 2021 Economics Question 50. It is one of the objective questions from the 2021 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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