Neco 2019 Economics Question 1

Practice objective / multiple choice question 1 from the 2019 Neco Economics examination.

Neco 2019 Economics Objective / Multiple Choice Hard Difficulty
Question 1 NECO • 2019 • ECONOMICS • objective

An intercity bus company faces a daily demand function \(Q = 5000 - 20P\), where \(P\) is the ticket price in naira and \(Q\) the number of passengers. The variable cost per passenger is ₦30 and the fixed daily cost is ₦40,000. The government offers a subsidy equal to 10 % of the ticket price per passenger, but only if the price does not exceed ₦150. The company will set a price not exceeding ₦150 to qualify for the subsidy and wants to maximise daily profit. Determine the ticket price that maximises profit, the corresponding number of passengers, and the maximum profit (in naira).

Answer Options

A. Ticket price ₦140.00, passengers 2,200, maximum profit ₦230,000
B. Ticket price ₦135.50, passengers 2,290, maximum profit ₦235,500
C. Ticket price ₦150.00, passengers 2,000, maximum profit ₦210,000
Correct Answer D. Ticket price ₦138.64, passengers 2,227, maximum profit ₦232,442
Correct Answer
D
Correct Option:
Ticket price ₦138.64, passengers 2,227, maximum profit ₦232,442

About This Question

This is Neco 2019 Economics Question 1. It is one of the objective questions from the 2019 Neco Economics examination.

Difficulty level: Hard .

View More Neco 2019 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