Waec Model Questions Vol1 2018 Commerce Question 3

Practice essay / theory question 3 from the 2018 Waec Model Questions Vol1 Commerce examination. This question covers Home Trade .

Waec Model Questions Vol1 2018 Commerce Essay / Theory

Topic: Home Trade

Question 3 WAEC_MODEL_QUESTIONS_VOL1 • 2018 • COMMERCE • essay

A small retail shop sells a single product. The shop incurs fixed monthly costs of ₦150,000. The variable cost of each unit is ₦250 and the regular selling price per unit is ₦500. The owner is considering offering a 10 % discount on the selling price and also wants to understand how a change in price will affect total revenue given the product’s price elasticity of demand of –1.5.

Question Parts

( a )

Calculate the break‑even quantity (in units) the shop must sell at the regular selling price.

( b )

If a 10 % discount is granted on the selling price, determine the new break‑even quantity and explain the effect of the discount on the shop’s cost‑volume‑profit relationship.

( c )

Given the price elasticity of demand (Eₚ) = –1.5, predict the percentage change in total revenue if the shop raises its regular selling price by 5 %. State whether total revenue will increase or decrease and show the calculation.

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About This Question

This is Waec Model Questions Vol1 2018 Commerce Question 3. It is one of the essay questions from the 2018 Waec Model Questions Vol1 Commerce examination.

The question covers Home Trade .

View More Waec Model Questions Vol1 2018 Commerce Questions More Waec Model Questions Vol1 Practice Questions Back to Questions

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