Neco Model Questions Vol1 2020 Economics Question 30
Practice objective / multiple choice question 30 from the 2020 Neco Model Questions Vol1 Economics examination.
A manufacturing firm produces two products, A and B. Fixed costs are \(\text{₦}500{,}000\). Variable costs per unit are \(\text{₦}30\) for A and \(\text{₦}20\) for B. The current selling prices are \(\text{₦}50\) for A and \(\text{₦}40\) for B, with monthly sales of \(10{,}000\) units of A and \(5{,}000\) units of B. The government introduces an environmental levy of \(\text{₦}5\) per unit of A and \(\text{₦}3\) per unit of B. To stay competitive, the firm reduces the price of A by \(5\%\) and raises the price of B by \(10\%\). Assuming the sales quantities remain unchanged, calculate the firm's new monthly profit (a negative value indicates a loss).
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About This Question
This is Neco Model Questions Vol1 2020 Economics Question 30. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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