Neco 2023 Economics Question 16

The TransportCo bus service has a fixed monthly cost of N500,000 and a variable cost of N150 per passenger. The ticket price is currently N500. The demand for tickets is given by \( Q = 2000 - 2P \) where \(P\) is the ticket price (in N) and \(Q\) is the number of passengers per month. (a) Calculate the profit (or loss) at the current price. (b) The company considers raising the ticket price to N600. Under the new price, 30 % of the passengers travel in groups of five and receive a 10 % discount on the ticket price. Assuming the demand function still applies, determine the profit (or loss) after the price change. (c) Is there any ticket price that would allow the company to break even (profit = 0) under the same demand function and cost structure (ignore the group discount)? Justify your answer.