WAEC Economics 2021 Theory — Question 9

Question 9 of 26 from the West African Examinations Council (WAEC) Economics 2021 Theory paper, with the correct answer and a full explanation.

2(d). If a total cost of $600.00 is incurred when 50 units of hats are produced, determine the margin of profit or loss made.

Model answer

At 50 units of output, Total Revenue = 50 × $80 = $4,000 (using the price at that output level). Profit = TR − TC = $4,000 − $600 = $3,400 profit.

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