Neco Model Questions Vol1 2022 Economics Question 4

Practice objective / multiple choice question 4 from the 2022 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2022 Economics Objective / Multiple Choice Medium Difficulty
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • objective

A monopolist faces the demand curve \(P = 200 - 4Q\) and has a constant marginal cost of \(MC = 40\) (no fixed cost).\n(a) Find the profit‑maximising output and price.\n(b) Calculate the monopoly profit.\n(c) If the market were perfectly competitive, determine the competitive output and price, and compute the dead‑weight loss caused by the monopoly.

Answer Options

A. Monopoly output = 20, price = 110, profit = 1400; Competitive output = 40, price = 40; Dead‑weight loss = 700
B. Monopoly output = 25, price = 100, profit = 1500; Competitive output = 50, price = 30; Dead‑weight loss = 900
C. Monopoly output = 15, price = 140, profit = 2100; Competitive output = 30, price = 80; Dead‑weight loss = 600
Correct Answer D. Monopoly output = 20, price = 120, profit = 1600; Competitive output = 40, price = 40; Dead‑weight loss = 800
Correct Answer
D
Correct Option:
Monopoly output = 20, price = 120, profit = 1600; Competitive output = 40, price = 40; Dead‑weight loss = 800

About This Question

This is Neco Model Questions Vol1 2022 Economics Question 4. It is one of the objective questions from the 2022 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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