Neco Model Questions Vol1 2023 Economics Question 4

Practice objective / multiple choice question 4 from the 2023 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2023 Economics Objective / Multiple Choice Medium Difficulty
Question 4 NECO_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • objective

A monopoly faces the linear demand curve \(P = 100 - 2Q\) and has a constant marginal cost of ₦20 per unit. Fixed costs are ₦200. (a) Determine the profit‑maximising output and price. (b) Compute the monopoly's profit. (c) Compare this outcome with perfect competition (price equal to marginal cost) and calculate the dead‑weight loss caused by monopoly power.

Answer Options

A. Output 25 units, price ₦50, profit ₦500; dead‑weight loss ₦250
B. Output 15 units, price ₦70, profit ₦450; dead‑weight loss ₦350
C. Output 18 units, price ₦55, profit ₦540; dead‑weight loss ₦300
Correct Answer D. Output 20 units, price ₦60, profit ₦600; dead‑weight loss ₦400
Correct Answer
D
Correct Option:
Output 20 units, price ₦60, profit ₦600; dead‑weight loss ₦400

About This Question

This is Neco Model Questions Vol1 2023 Economics Question 4. It is one of the objective questions from the 2023 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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