Neco Model Questions Vol1 2020 Economics Question 5

Practice essay / theory question 5 from the 2020 Neco Model Questions Vol1 Economics examination. This question covers Cost and Revenue, Average Cost, Marginal Cost, Profit Maximisation .

Neco Model Questions Vol1 2020 Economics Essay / Theory
Topics: Cost and Revenue Average Cost Marginal Cost Profit Maximisation
Question 5 NECO_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • essay

A small manufacturing firm produces wooden chairs. The following data show the total cost (TC) incurred at different levels of output (Q).

Question Parts

( a )
Calculate the average total cost (ATC) at each output level and state the output at which ATC is minimum.
( b )
Using the data, estimate the marginal cost (MC) of producing the 151st to the 200th unit (i.e., between Q = 150 and Q = 200). Explain the method you used.
( c )
The firm can sell each chair at a market price of ₦3,500. Assuming the firm produces the output level that maximises profit, determine the output level it should choose and compute the maximum profit. Show all reasoning steps.
( d )
Discuss two non‑price factors that could influence the firm’s decision to expand production beyond the profit‑maximising output identified in part (c).

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About This Question

This is Neco Model Questions Vol1 2020 Economics Question 5. It is one of the essay questions from the 2020 Neco Model Questions Vol1 Economics examination.

The question covers Cost and Revenue, Average Cost, Marginal Cost, Profit Maximisation .

View More Neco Model Questions Vol1 2020 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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