Neco 2022 Economics Question 6
Practice objective / multiple choice question 6 from the 2022 Neco Economics examination.
An industry firm uses the Cobb‑Douglas production function \( Q = K^{0.4} L^{0.6} \). The capital stock is fixed at \( K = 100 \) units. The cost of capital is ₦200 per unit and the wage rate for labor is ₦50 per unit. The firm sells its output at a uniform price \( P \) per unit and aims to earn a profit of at least ₦500,000. Assuming the firm chooses the amount of labor \( L \) that maximizes profit for a given price, determine the minimum price \( P \) (in ₦) that the firm must charge per unit of output to achieve the target profit.
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About This Question
This is Neco 2022 Economics Question 6. It is one of the objective questions from the 2022 Neco Economics examination.
Difficulty level: Hard .
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