Neco Model Questions Vol1 2025 Economics Question 8
Practice objective / multiple choice question 8 from the 2025 Neco Model Questions Vol1 Economics examination.
A firm produces output \(Q\) according to the Cobb‑Douglas function \(Q = 10 L^{0.5} K^{0.5}\), where \(L\) and \(K\) are units of labour and capital respectively. The market price of output is ₦100 per unit and the government imposes a specific tax of ₦50 per unit of output. The wage rate is ₦200 per unit of labour and the rental rate of capital is ₦500 per unit of capital. Determine the profit‑maximising levels of \(L\) and \(K\) and state the maximum profit (in billions of naira).
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About This Question
This is Neco Model Questions Vol1 2025 Economics Question 8. It is one of the objective questions from the 2025 Neco Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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