Gce Model Questions Vol1 2022 Economics Question 5

Practice essay / theory question 5 from the 2022 Gce Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Gce Model Questions Vol1 2022 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 GCE_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • essay

A manufacturing firm produces a single product. Its total cost (TC) in thousands of naira for producing Q thousand units is given by TC = 0.5Q² + 20Q + 150. The market price of the product is constant at ₦30 per unit, so total revenue (TR) = 30Q (in thousands of naira).

Question Parts

( a )

Derive the expressions for average cost (AC) and marginal cost (MC).

( b )

Using the profit‑maximising rule, determine the output level (Q*) that maximises profit and calculate the maximum profit (in thousands of naira).

( c )

Discuss the short‑run shutdown condition for this firm and explain whether the firm should continue operating in the short run at the output found in part (b).

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About This Question

This is Gce Model Questions Vol1 2022 Economics Question 5. It is one of the essay questions from the 2022 Gce Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

View More Gce Model Questions Vol1 2022 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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