Neco Model Questions Vol1 2018 Economics Question 38

Practice objective / multiple choice question 38 from the 2018 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2018 Economics Objective / Multiple Choice Hard Difficulty
Question 38 NECO_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

A firm produces widgets. Fixed cost is \(\text{₦}500{,}000\). Variable cost per unit is \(\text{₦}150\). Each widget sells for \(\text{₦}250\). The government imposes a per‑unit tax of \(\text{₦}30\).\n(a) Find the original break‑even output (without tax).\n(b) Find the new break‑even output after the tax.\n(c) State the percentage increase in the break‑even output caused by the tax (rounded to two decimal places).

Answer Options

A. New break‑even = 7,500 units; increase = 50.00%
Correct Answer B. New break‑even = 7,143 units; increase = 42.86%
C. New break‑even = 6,250 units; increase = 35.71%
D. New break‑even = 8,000 units; increase = 57.14%
Correct Answer
B
Correct Option:
New break‑even = 7,143 units; increase = 42.86%

About This Question

This is Neco Model Questions Vol1 2018 Economics Question 38. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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