Waec Model Questions Vol1 2022 Economics Question 2

Practice essay / theory question 2 from the 2022 Waec Model Questions Vol1 Economics examination. This question covers Demand and Supply .

Waec Model Questions Vol1 2022 Economics Essay / Theory
Topic: Demand and Supply
Question 2 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • essay

The market for rice in a developing country can be represented by the linear demand function Qd = 8,000 – 20P and the initial supply function Qs = 2,000 + 10P, where Q is quantity in bags per month and P is price in Naira per bag.

Question Parts

( a )
Determine the initial equilibrium price and quantity before any external changes.
( b )
A bumper harvest reduces production costs, shifting the supply curve rightward so that the new supply function becomes Qs' = 3,000 + 10P. Calculate the new equilibrium price and quantity.
( c )
The government then imposes a price ceiling of ₦150 per bag, which is below the equilibrium price found in part (b). Determine the quantity demanded and quantity supplied at this ceiling and state the resulting shortage.
( d )
To alleviate the shortage, the government gives producers a per‑bag subsidy of ₦20. The subsidy effectively shifts the supply curve to Qs'' = 3,200 + 10P. Re‑calculate the quantity supplied at the ceiling price of ₦150, the new shortage, and briefly discuss how the subsidy affects consumer and producer welfare.

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About This Question

This is Waec Model Questions Vol1 2022 Economics Question 2. It is one of the essay questions from the 2022 Waec Model Questions Vol1 Economics examination.

The question covers Demand and Supply .

View More Waec Model Questions Vol1 2022 Economics Questions More Waec Model Questions Vol1 Practice Questions Back to Questions

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