Neco 2020 Economics Question 5

Practice essay / theory question 5 from the 2020 Neco Economics examination. This question covers Cost and Revenue .

Neco 2020 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 NECO • 2020 • ECONOMICS • essay

A small manufacturing firm produces widgets. The total cost (TC) consists of a fixed cost and a variable cost that is constant per unit. The following information is available: - When output (q) is 0 units, TC = ₦120,000. - When output is 200 units, TC = ₦260,000. - When output is 500 units, TC = ₦530,000. Each widget is sold for ₦1,200. Answer the following questions:

( a )

Determine the fixed cost and the variable cost per unit. (i) Show clearly how the two values are obtained.

( b )

Write the cost function TC(q) and the revenue function R(q).

( c )

Find the break‑even output level (the quantity at which profit is zero).

( d )

If the firm wants to earn a profit of ₦300,000, what minimum output should it produce? State the result and comment on its feasibility.

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This is Neco 2020 Economics Question 5. It is one of the essay questions from the 2020 Neco Economics examination.

The question covers Cost and Revenue .

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