Gce Model Questions Vol1 2022 Economics Question 24

Practice objective / multiple choice question 24 from the 2022 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2022 Economics Objective / Multiple Choice Hard Difficulty
Question 24 GCE_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

A firm faces the market demand \(P = 200 - 2Q\) and has total cost \(C(Q) = 0.5Q^{2} + 20Q + 1000\). Determine the profit‑maximising output, the corresponding price, the level of profit, and state whether the firm is experiencing economies of scale at that output.

Answer Options

A. Output = 38 units, Price = $128, Profit = $2,500, Economies of scale are present (LRMC < LRAC).
Correct Answer B. Output = 36 units, Price = $128, Profit = $2,240, Economies of scale are present (LRMC < LRAC).
C. Output = 36 units, Price = $124, Profit = $2,240, Economies of scale are absent (LRMC > LRAC).
D. Output = 34 units, Price = $132, Profit = $2,100, Economies of scale are present (LRMC < LRAC).
Correct Answer
B
Correct Option:
Output = 36 units, Price = $128, Profit = $2,240, Economies of scale are present (LRMC < LRAC).

About This Question

This is Gce Model Questions Vol1 2022 Economics Question 24. It is one of the objective questions from the 2022 Gce Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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