Neco Model Questions Vol1 2022 Economics Question 5

Practice essay / theory question 5 from the 2022 Neco Model Questions Vol1 Economics examination. This question covers Cost and Revenue, Economics .

Neco Model Questions Vol1 2022 Economics Essay / Theory

Topics: Cost and Revenue Economics

Question 5 NECO_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • essay

A small manufacturing firm produces a single product. Its total cost (TC) function is given by TC = ₦500,000 + ₦8,000 Q, where Q is the quantity of output produced per month. The current market price of the product is ₦15,000 per unit.

Question Parts

( a )

Determine the break‑even output level (in units) for the firm at the current price.

( b )

If the market price falls to ₦12,000 per unit, recalculate the break‑even output and discuss briefly how this change would affect the firm’s short‑run production decision.

( c )

Assuming the firm continues to produce 200 units per month at the original price of ₦15,000, calculate the monthly profit (or loss) and advise whether the firm should maintain, increase or reduce its output, giving a short justification.

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About This Question

This is Neco Model Questions Vol1 2022 Economics Question 5. It is one of the essay questions from the 2022 Neco Model Questions Vol1 Economics examination.

The question covers Cost and Revenue, Economics .

View More Neco Model Questions Vol1 2022 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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