Waec Model Questions Vol1 2022 Economics Question 3

Practice essay / theory question 3 from the 2022 Waec Model Questions Vol1 Economics examination. This question covers Elasticity .

Waec Model Questions Vol1 2022 Economics Essay / Theory

Topic: Elasticity

Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2022 • ECONOMICS • essay

A local retailer sells a type of hand‑woven bag. The following data were recorded for two price points:

Question Parts

( a )

When the price was reduced from ₦200 to ₦180, the quantity sold rose from 5,000 units to 5,600 units. Calculate the price elasticity of demand (using the midpoint method) for this price change.

( b )

Interpret the elasticity value obtained in part (a). State whether demand is elastic, inelastic or unit‑elastic over this range.

( c )

If the retailer now considers raising the price by 5 % from the current price of ₦180, predict the likely effect on total revenue. Justify your answer using the elasticity concept.

( d )

Based on your analysis, recommend a short‑term pricing strategy for the retailer that would maximise revenue.

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About This Question

This is Waec Model Questions Vol1 2022 Economics Question 3. It is one of the essay questions from the 2022 Waec Model Questions Vol1 Economics examination.

The question covers Elasticity .

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

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