Gce Model Questions Vol1 2022 Economics Question 19

Practice objective / multiple choice question 19 from the 2022 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2022 Economics Objective / Multiple Choice Medium Difficulty
Question 19 GCE_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

The market demand for a good is \(P = 100 - 2Q\). The firm's total cost function is \(TC = 20Q + 0.5Q^{2}\) (no fixed cost).\n(a) Assuming perfect competition, find the equilibrium output, price and profit.\n(b) Assuming the firm is a monopoly, find the profit‑maximising output, price and profit.\n(c) Compare the two profit levels.

Answer Options

A. Perfect competition profit ≈ £210; Monopoly profit = £540; Monopoly profit is higher by ≈ £330
B. Perfect competition profit ≈ £300; Monopoly profit = £620; Monopoly profit is higher by ≈ £320
Correct Answer C. Perfect competition profit ≈ £356; Monopoly profit = £640; Monopoly profit is higher by ≈ £284
D. Perfect competition profit ≈ £400; Monopoly profit = £580; Monopoly profit is higher by ≈ £180
Correct Answer
C
Correct Option:
Perfect competition profit ≈ £356; Monopoly profit = £640; Monopoly profit is higher by ≈ £284

About This Question

This is Gce Model Questions Vol1 2022 Economics Question 19. It is one of the objective questions from the 2022 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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