Neco Model Questions Vol1 2021 Economics Question 20

Practice objective / multiple choice question 20 from the 2021 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2021 Economics Objective / Multiple Choice Medium Difficulty
Question 20 NECO_MODEL_QUESTIONS_VOL1 • 2021 • ECONOMICS • objective

A firm faces the linear demand curve \(P = 500 - 4Q\). Its total cost function is \(TC = 2000 + 20Q + 0.5Q^{2}\).\n\n(a) Find the output level that maximises profit, the corresponding price, and the maximum profit (all rounded to two decimal places).\n(b) Determine the quantities at which the firm breaks even (profit = 0). Give both break‑even quantities rounded to two decimal places.

Answer Options

A. Q* = 53.33 units; Price = ₦280.00; Max profit = ₦10,000.00; Break‑even quantities = 4.34 units and 110.00 units
Correct Answer B. Q* = 53.33 units; Price = ₦286.67; Max profit = ₦10,799.84; Break‑even quantities = 4.34 units and 102.32 units
C. Q* = 48.75 units; Price = ₦306.99; Max profit = ₦9,500.12; Break‑even quantities = 5.12 units and 98.45 units
D. Q* = 60.00 units; Price = ₦260.00; Max profit = ₦11,200.00; Break‑even quantities = 3.80 units and 105.60 units
Correct Answer
B
Correct Option:
Q* = 53.33 units; Price = ₦286.67; Max profit = ₦10,799.84; Break‑even quantities = 4.34 units and 102.32 units

About This Question

This is Neco Model Questions Vol1 2021 Economics Question 20. It is one of the objective questions from the 2021 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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