Gce Model Questions Vol1 2022 Economics Question 38
Practice objective / multiple choice question 38 from the 2022 Gce Model Questions Vol1 Economics examination.
A firm in a monopolistically competitive market faces the demand curve \( P = 120 - 2Q \). Its marginal cost is constant at \( MC = 20 \) and fixed cost is \( FC = 200 \).\n(a) Determine the profit‑maximising output and price.\n(b) Calculate average total cost at that output and state whether the firm is operating with excess capacity (i.e., producing less than the output at which ATC is minimised).
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About This Question
This is Gce Model Questions Vol1 2022 Economics Question 38. It is one of the objective questions from the 2022 Gce Model Questions Vol1 Economics examination.
Difficulty level: Medium .
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