Gce Model Questions Vol1 2022 Economics Question 6

Practice essay / theory question 6 from the 2022 Gce Model Questions Vol1 Economics examination. This question covers Market Structures .

Gce Model Questions Vol1 2022 Economics Essay / Theory

Topic: Market Structures

Question 6 GCE_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • essay

Consider a market for a homogeneous good where the demand curve is P = 100 – 2Q (P in naira, Q in thousand units). The firm's total cost function is C = 20Q + 100 (in thousand naira).

Question Parts

( a )

State two characteristic features of a perfectly competitive market and two of a monopoly.

( b )

Assuming the firm operates as a price‑taking firm (perfect competition) and as a profit‑maximising monopoly, determine for each case: i. Equilibrium output (Q) and price (P). ii. Consumer surplus (CS) and producer surplus (PS) for perfect competition. iii. Monopoly profit, and the resulting dead‑weight loss (DWL) compared with perfect competition.

( c )

The government imposes a price ceiling of ₦40 per unit in this market (still a monopoly). Discuss the likely effects on output, welfare (CS, PS, DWL) and the incentives for the monopolist.

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About This Question

This is Gce Model Questions Vol1 2022 Economics Question 6. It is one of the essay questions from the 2022 Gce Model Questions Vol1 Economics examination.

The question covers Market Structures .

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

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