Neco 2018 Economics Question 20

Practice objective / multiple choice question 20 from the 2018 Neco Economics examination.

Neco 2018 Economics Objective / Multiple Choice Hard Difficulty
Question 20 NECO • 2018 • ECONOMICS • objective

A firm must transport 500 tonnes of raw material from a mine to its factory. Two transport options are available:\n- Rail: can carry up to 300 tonnes, cost \(\text{₦}150\) per tonne, plus a fixed handling fee of \(\text{₦}20,000\) if any rail shipment is used.\n- Road: can carry any amount up to 500 tonnes, cost \(\text{₦}200\) per tonne, plus a loading fee of \(\text{₦}5,000\) for each road shipment (any positive amount).\nDetermine the optimal tonnage to be shipped by rail and by road that minimises total transport cost, and state the minimum total cost.

Answer Options

A. Rail: 300 tonnes, Road: 200 tonnes, Minimum cost = 110000
Correct Answer B. Rail: 0 tonnes, Road: 500 tonnes, Minimum cost = 105000
C. Rail: 250 tonnes, Road: 250 tonnes, Minimum cost = 112500
D. Rail: 100 tonnes, Road: 400 tonnes, Minimum cost = 120000
Correct Answer
B
Correct Option:
Rail: 0 tonnes, Road: 500 tonnes, Minimum cost = 105000

About This Question

This is Neco 2018 Economics Question 20. It is one of the objective questions from the 2018 Neco Economics examination.

Difficulty level: Hard .

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