Waec Model Questions Vol1 2023 Economics Question 39

Practice objective / multiple choice question 39 from the 2023 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2023 Economics Objective / Multiple Choice Hard Difficulty
Question 39 WAEC_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • objective

A manufacturing plant has fixed cost N5,000,000. It produces two products, A and B. Variable cost per unit is N200 for A and N150 for B. The selling prices are N350 for A and N250 for B. Because of capacity limits, the total output (A + B) cannot exceed 30,000 units per year. Determine the production quantities of A and B that maximise total profit, the maximum profit (in Naira), and state whether the plant is operating under increasing, constant or decreasing returns to scale at that output level.

Answer Options

A. A = 20,000 units, B = 10,000 units; Maximum profit = -200,000 N; Returns to scale: increasing
B. A = 15,000 units, B = 15,000 units; Maximum profit = 0 N; Returns to scale: constant
C. A = 0 units, B = 30,000 units; Maximum profit = -1,500,000 N; Returns to scale: decreasing
Correct Answer D. A = 30,000 units, B = 0 units; Maximum profit = -500,000 N; Returns to scale: increasing
Correct Answer
D
Correct Option:
A = 30,000 units, B = 0 units; Maximum profit = -500,000 N; Returns to scale: increasing

About This Question

This is Waec Model Questions Vol1 2023 Economics Question 39. It is one of the objective questions from the 2023 Waec Model Questions Vol1 Economics examination.

Difficulty level: Hard .

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