Neco Model Questions Vol1 2021 Economics Question 19

Practice objective / multiple choice question 19 from the 2021 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 19 NECO_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

The competitive market for a product is described by demand \(P = 200 - 0.5Q\) and supply \(P = 20 + 0.2Q\).\n\nA monopoly faces the same demand curve and has a constant marginal cost equal to the competitive equilibrium price. The government imposes a per‑unit tax of \(\text{₦}30\) on the monopoly.\n\n(a) Determine the monopoly's profit‑maximising quantity and the price it charges to consumers.\n(b) Compute the monopoly's profit after tax.\n(c) Calculate the dead‑weight loss relative to the competitive outcome, expressed in Naira and rounded to two decimal places.

Answer Options

A. Quantity = 88 units; Price = ₦145.00; Profit = ₦4,200.10; DWL = ₦4,500.60
B. Quantity = 102 units; Price = ₦152.30; Profit = ₦5,100.25; DWL = ₦3,500.75
C. Quantity = 95 units; Price = ₦148.50; Profit = ₦4,500.00; DWL = ₦4,200.00
Correct Answer D. Quantity = 99 units; Price = ₦150.72; Profit = ₦4,858.03; DWL = ₦3,907.57
Correct Answer
D
Correct Option:
Quantity = 99 units; Price = ₦150.72; Profit = ₦4,858.03; DWL = ₦3,907.57

About This Question

This is Neco Model Questions Vol1 2021 Economics Question 19. It is one of the objective questions from the 2021 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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