Neco Model Questions Vol1 2018 Economics Question 50

Practice objective / multiple choice question 50 from the 2018 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2018 Economics Objective / Multiple Choice Medium Difficulty
Question 50 NECO_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • objective

A monopolist faces the linear demand curve \(P = 200 - 2Q\) and has total cost \(TC = 20Q + 0.5Q^{2}\). (a) Determine the profit‑maximising output, price and profit. (b) Under perfect competition the firm would produce where price equals marginal cost. Find the competitive output and price and the corresponding profit. (c) Compute the dead‑weight loss associated with the monopoly relative to the competitive outcome.

Answer Options

A. Monopoly: Q=34, P=₦130, profit=₦3,100. Competition: Q=58, P=₦85, profit=₦1,700. DWL = ₦540.
Correct Answer B. Monopoly: Q=36, P=₦128, profit=₦3,240. Competition: Q=60, P=₦80, profit=₦1,800. DWL = ₦576.
C. Monopoly: Q=40, P=₦120, profit=₦3,600. Competition: Q=65, P=₦75, profit=₦1,500. DWL = ₦500.
D. Monopoly: Q=30, P=₦140, profit=₦2,800. Competition: Q=55, P=₦90, profit=₦1,650. DWL = ₦620.
Correct Answer
B
Correct Option:
Monopoly: Q=36, P=₦128, profit=₦3,240. Competition: Q=60, P=₦80, profit=₦1,800. DWL = ₦576.

About This Question

This is Neco Model Questions Vol1 2018 Economics Question 50. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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