Gce Model Questions Vol1 2024 Economics Question 47

Practice objective / multiple choice question 47 from the 2024 Gce Model Questions Vol1 Economics examination.

Gce Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 47 GCE_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

A firm in a monopolistically‑competitive market faces the demand curve \(P = 120 - 2Q\) and has a constant marginal cost of \(MC = 20\).\ (a) Determine the profit‑maximising output, price and economic profit for the firm.\ (b) If the same firm operated in a perfectly competitive market with the same marginal cost, what would be the market price and the firm's profit?\ (c) State the difference in profit between the two market structures.

Answer Options

A. Profit under monopoly = 1250; profit under perfect competition = 0; difference = 1300
Correct Answer B. Profit under monopoly = 1250; profit under perfect competition = 0; difference = 1250
C. Profit under monopoly = 1150; profit under perfect competition = 0; difference = 1150
D. Profit under monopoly = 1250; profit under perfect competition = 100; difference = 1150
Correct Answer
B
Correct Option:
Profit under monopoly = 1250; profit under perfect competition = 0; difference = 1250

About This Question

This is Gce Model Questions Vol1 2024 Economics Question 47. It is one of the objective questions from the 2024 Gce Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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