### 2023 WAEC Economics Theory a. i. Table 1 below represents the output levels of a firm producing hand sanitizer....

Economics
WAEC 2023

a.

i. Table 1 below represents the output levels of a firm producing hand sanitizer. Use the information to answer the questions that follow.

Table 1

 Output     (units) 0 10 18 28 36 45

If the cost function of the firm is given as C = 30 + 4q, where C is the total cost and q is the units produced, calculate the:

total cost in dollars of producing:

18 units

ii. Table 1 below represents the output levels of a firm producing hand sanitizer. Use the information to answer the questions that follow.

Table 1

 Output     (units) 0 10 18 28 36 45

If the cost function of the firm is given as C = 30 + 4q, where C is the total cost and q is the units produced, calculate the:

total cost in dollars of producing:
36 units

b.

i. Average costs in dollars of producing:
28 units

ii. Average costs in dollars of producing:
45 units

c. What is the marginal cost in dollars of producing 28 units?

d. Determine the profit made from producing 45 units when the market price is fixed at $5.00 per unit. e. Determine the fixed cost of the firm. Explain your answer. ##### Explanation ai. C = 30 + 4q when q = 18units C = 30 + 4(18) = 30 + 72 = 102 dollars aii. C = 30 + 4q when q = 36 units C = 30 + 4(36) = 30 + 144 = 174 dollars bi. At 28 units Average cost = $$\frac{Total Cost}{Quantity}$$ NOTE: TC = C = 30 + 4q Therefore, AC =$$\frac{30+4q}{q}$$ = $$\frac{30+4(28)}{q}$$ =$$\frac{142}{28}$$ = 5.07 dollars bii. At 45 units Average cost = $$\frac{Total Cost}{Quantity}$$ NOTE: TC = C = 30 + 4q Therefore, AC =$$\frac{30+4q}{q}$$ = $$\frac{30+4(45)}{45}$$ =$$\frac{210}{45}$$ = 4.66 dollars c. Marginal cost at 28 units produced = Total cost at 28 units - Total cost at 18 units =$$\frac{30+4(28)-30+4(18)}{28-18}$$ = $$\frac{142-102}{10}$$ =$4.00

d.

Profit (π) = Total sales at 45 units - Total cost at 45 units
= ($5 x 45) - ( 30 + 4(45)) = 225 - 210 =$15.00

e.

Fixed cost is zero. Fixed cost is a cost that does not change, i.e when q = 0 then C = 30 +4(0)
= C = 30 + 4(0)
= 30 + 0
= \$30