Neco 2021 Economics Question 32

Practice objective / multiple choice question 32 from the 2021 Neco Economics examination.

Neco 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 32 NECO • 2021 • ECONOMICS • objective

A firm in a monopolistically competitive market faces the demand curve \(P = 120 - 2Q\) (price in Naira). Its total cost function is \(TC = 200 + 20Q + 0.5Q^{2}\). Determine the output level that maximizes profit, compute the profit, and state whether the firm should continue operating in the short run.

Answer Options

A. Q=20 units, profit=₦500, continue operating
Correct Answer B. Q=20 units, profit=₦800, continue operating
C. Q=20 units, profit=₦800, cease operating
D. Q=15 units, profit=₦600, continue operating
Correct Answer
B
Correct Option:
Q=20 units, profit=₦800, continue operating

About This Question

This is Neco 2021 Economics Question 32. It is one of the objective questions from the 2021 Neco Economics examination.

Difficulty level: Medium .

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