Neco Model Questions Vol1 2025 Economics Question 5

A farmer cultivates maize on 10 hectares. The yield per hectare (in tonnes) depends on the amount of fertilizer applied per hectare \(L\) (kg) according to\n\n\[ Y = 2L - 0.05L^{2}. \]\n\nFertiliser costs ₦150 per kg, other variable costs are ₦20 000 per hectare, and total fixed costs are ₦100 000. The market price of maize is ₦120 000 per tonne.\n\n(a) Determine the amount of fertilizer per hectare that maximises profit.\n\n(b) Compute the farmer's total profit (in Naira) when the optimal fertilizer level is used on the 10 hectares.\n\n(c) Should the farmer expand cultivation to 12 hectares if the marginal profit per additional hectare (at the optimal \(L\)) exceeds the average fixed cost per hectare? State "Yes" or "No".