Neco Model Questions Vol1 2019 Economics Question 5

Practice essay / theory question 5 from the 2019 Neco Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Neco Model Questions Vol1 2019 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 NECO_MODEL_QUESTIONS_VOL1 • 2019 • ECONOMICS • essay

A small manufacturing firm produces a single product. Its total cost (TC) function is TC = 200 + 5Q + 0.02Q^2, where Q is the quantity produced per month. The market demand for the product is represented by the inverse demand equation P = 150 – 0.5Q, where P is the price per unit in naira.

Question Parts

( a )

Derive the expressions for marginal cost (MC) and marginal revenue (MR).

( b )

Determine the profit‑maximising output level and the corresponding price. Show all steps.

( c )

Calculate the maximum profit (or loss) at that output.

( d )

If the fixed cost (the constant term in the TC function) rises by 10 %, explain qualitatively how the profit‑maximising output and profit will be affected, without re‑solving the whole problem.

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About This Question

This is Neco Model Questions Vol1 2019 Economics Question 5. It is one of the essay questions from the 2019 Neco Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

View More Neco Model Questions Vol1 2019 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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