Neco Model Questions Vol1 2024 Economics Question 5

Practice essay / theory question 5 from the 2024 Neco Model Questions Vol1 Economics examination. This question covers Cost and Revenue .

Neco Model Questions Vol1 2024 Economics Essay / Theory

Topic: Cost and Revenue

Question 5 NECO_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • essay

A manufacturing firm produces widgets. Its total cost (TC) in ₦ for producing Q units is given in the table below. The market demand for widgets is described by the price‑output relationship P = 200 – 0.1Q, where P is the price per widget in ₦. | Q (units) | TC (₦) | |-----------|--------| | 0 | 20,000 | | 200 | 22,800 | | 400 | 27,200 | | 600 | 33,200 | | 800 | 40,800 | | 1,000 | 50,000 | Using the information above, answer the following:

Question Parts

( a )

Calculate total revenue (TR) and profit (π) for each output level shown in the table.

( b )

Identify the output level that yields the maximum profit and state the maximum profit value.

( c )

The government introduces a specific tax of ₦20 per widget. Re‑calculate the profit at the profit‑maximising output and comment on the effect of the tax on profit and on the firm’s break‑even point.

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About This Question

This is Neco Model Questions Vol1 2024 Economics Question 5. It is one of the essay questions from the 2024 Neco Model Questions Vol1 Economics examination.

The question covers Cost and Revenue .

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