Neco Model Questions Vol1 2018 Geography Question 42
Practice objective / multiple choice question 42 from the 2018 Neco Model Questions Vol1 Geography examination.
A widget‑manufacturing firm has fixed costs of \(\₦2,000,000\) per year. The variable production cost is \(\₦500\) per unit and the selling price is \(\₦800\) per unit. Transportation cost is \(\₦0.05\) per kilometre per unit. The nearest market is 200 km away, but a new highway reduces this distance to 120 km. The firm also sells 3,000 units annually to a secondary market 500 km away (same price and production cost). Assuming sales volumes remain 5,000 units to the nearest market and 3,000 units to the secondary market, what is the increase in annual profit (in \(\₦\)) after the highway is opened?
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About This Question
This is Neco Model Questions Vol1 2018 Geography Question 42. It is one of the objective questions from the 2018 Neco Model Questions Vol1 Geography examination.
Difficulty level: Hard .
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