Neco 2018 Economics Question 1

Practice objective / multiple choice question 1 from the 2018 Neco Economics examination.

Neco 2018 Economics Objective / Multiple Choice Medium Difficulty
Question 1 NECO • 2018 • ECONOMICS • objective

A monopolist faces the demand equation \( P = 120 - 2Q \) and has constant marginal cost of \(20\) per unit. The government imposes a specific tax of \(10\) per unit on the firm. Determine the new equilibrium price paid by consumers, the equilibrium output, and the change in consumer surplus compared with the situation before the tax.

Answer Options

A. New price = 80, new output = 20 units, consumer surplus falls by 100
B. New price = 85, new output = 18.75 units, consumer surplus falls by 140.625
Correct Answer C. New price = 75, new output = 22.5 units, consumer surplus falls by 118.75
D. New price = 70, new output = 25 units, consumer surplus falls by 125
Correct Answer
C
Correct Option:
New price = 75, new output = 22.5 units, consumer surplus falls by 118.75

About This Question

This is Neco 2018 Economics Question 1. It is one of the objective questions from the 2018 Neco Economics examination.

Difficulty level: Medium .

View More Neco 2018 Economics Questions More Neco Practice Questions Back to Questions

Master the Exam!

You've seen a preview, but there are thousands more questions plus AI tutor to break down complex solutions.

Unlock Full Access Available for Android & Windows
Chat with Support