Neco 2025 Economics Question 4

Practice essay / theory question 4 from the 2025 Neco Economics examination. This question covers Production .

Neco 2025 Economics Essay / Theory

Topic: Production

Question 4 NECO • 2025 • ECONOMICS • essay

A small manufacturing firm produces two products, A and B, using a common fixed factor of production (factory space) and variable labour. The total cost function for the firm is:

Question Parts

( a )

Write down the profit function in terms of Q_A and Q_B.

( b )

Derive the first‑order conditions for profit maximisation with respect to Q_A and Q_B.

( c )

Solve the simultaneous equations obtained in part (b) to find the profit‑maximising output levels of A and B (give answers to the nearest whole unit).

( d )

Calculate the maximum profit at these output levels.

( e )

Explain briefly how the interaction term (0.05 Q_A Q_B) in the cost function influences the firm’s production decision.

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About This Question

This is Neco 2025 Economics Question 4. It is one of the essay questions from the 2025 Neco Economics examination.

The question covers Production .

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