Neco Model Questions Vol1 2020 Economics Question 44

Practice objective / multiple choice question 44 from the 2020 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2020 Economics Objective / Multiple Choice Hard Difficulty
Question 44 NECO_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • objective

A wheat farmer's total cost function is \(TC = 500 + 20Q + 0.1Q^{2}\) (₦), where \(Q\) is output in tonnes. The market price is determined by the linear demand function \(P = 200 - 0.5Q\) (₦ per tonne).\n(a) Find the output level that maximises profit and compute the maximum profit.\n(b) If the government introduces a subsidy of ₦30 per tonne on the farmer's output, what is the new profit at the profit‑maximising output?

Answer Options

A. Profit without subsidy = ₦14,500; profit with subsidy = ₦18,000
B. Profit without subsidy = ₦12,000; profit with subsidy = ₦16,500
Correct Answer C. Profit without subsidy = ₦13,000; profit with subsidy = ₦17,500
D. Profit without subsidy = ₦13,500; profit with subsidy = ₦17,000
Correct Answer
C
Correct Option:
Profit without subsidy = ₦13,000; profit with subsidy = ₦17,500

About This Question

This is Neco Model Questions Vol1 2020 Economics Question 44. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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