Neco 2017 Economics Question 5

Practice essay / theory question 5 from the 2017 Neco Economics examination. This question covers Cost and Revenue .

Neco 2017 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 NECO • 2017 • ECONOMICS • essay

A small manufacturing firm produces a single type of widget. The firm incurs a fixed cost of ₦1,200,000 per month. The variable cost per widget is ₦150. The widgets are sold at a constant price of ₦300 each.

Question Parts

( a )

Determine the break‑even output (the number of widgets that must be sold each month for total revenue to equal total cost).

( b )

If the variable cost per widget rises by 10 % because of an increase in raw‑material prices, calculate the new break‑even output.

( c )

Assuming the firm continues to produce and sell 5,000 widgets per month after the cost increase, compute the monthly profit (or loss) and comment on the financial implication for the firm.

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About This Question

This is Neco 2017 Economics Question 5. It is one of the essay questions from the 2017 Neco Economics examination.

The question covers Cost and Revenue .

View More Neco 2017 Economics Questions More Neco Practice Questions Back to Questions

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