Neco Model Questions Vol1 2020 Economics Question 46

Practice objective / multiple choice question 46 from the 2020 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2020 Economics Objective / Multiple Choice Hard Difficulty
Question 46 NECO_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • objective

On a certain bus route the daily number of passengers Q (in persons) depends on the fare per passenger P (in Naira) according to \( Q = 8000 - 200P \). The variable cost of operating the bus per passenger is ₦5 and the fixed daily cost is ₦20,000. Determine the fare that maximizes the company's daily profit and calculate the maximum profit.

Answer Options

A. Optimal fare = ₦20 per passenger; Maximum profit = ₦38,000
Correct Answer B. Optimal fare = ₦22.5 per passenger; Maximum profit = ₦41,250
C. Optimal fare = ₦30 per passenger; Maximum profit = ₦45,000
D. Optimal fare = ₦25 per passenger; Maximum profit = ₦42,500
Correct Answer
B
Correct Option:
Optimal fare = ₦22.5 per passenger; Maximum profit = ₦41,250

About This Question

This is Neco Model Questions Vol1 2020 Economics Question 46. It is one of the objective questions from the 2020 Neco Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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