Gce Model Questions Vol1 2024 Agricultural Science Question 5
Practice objective / multiple choice question 5 from the 2024 Gce Model Questions Vol1 Agricultural Science examination.
A tomato farmer produces \(5{,}000\) kg of tomatoes. The market price is \(150\) ₦ kg\(^{-1}\). The total cost function is \( C = 200{,}000 + 20Q \) where \(Q\) is the quantity produced (kg). The price elasticity of demand for tomatoes is \(-0.5\). Assuming a linear approximation, the farmer considers changing the price by an amount \(\Delta P\) (which may be positive or negative). Using the elasticity, the change in quantity sold is approximated by \( \frac{\Delta Q}{Q_0} = \varepsilon \frac{\Delta P}{P_0} \) where \(Q_0 = 5{,}000\) kg and \(P_0 = 150\) ₦ kg\(^{-1}\). Determine the price change \(\Delta P\) that maximises profit and compute the resulting maximum profit (to the nearest Naira).
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This is Gce Model Questions Vol1 2024 Agricultural Science Question 5. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Agricultural Science examination.
Difficulty level: Hard .
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