Gce Model Questions Vol1 2018 Economics Question 2

Practice essay / theory question 2 from the 2018 Gce Model Questions Vol1 Economics examination. This question covers Demand and Supply, Tax Incidence, Supply Shift, Welfare Analysis .

Gce Model Questions Vol1 2018 Economics Essay / Theory

Topics: Demand and Supply Tax Incidence Supply Shift Welfare Analysis

Question 2 GCE_MODEL_QUESTIONS_VOL1 • 2018 • ECONOMICS • essay

The market for wheat is described by the following linear demand and supply equations: Demand: Qd = 8000 – 20P Supply (initial): Qs = 30P – 2000 where P is the price (₦ per kg) and Q is the quantity (kg). The government introduces a specific tax of ₦50 per kg on wheat producers. At the same time, a new production technology reduces producers’ marginal cost by ₦10 per kg, effectively shifting the supply curve downward. Assume the demand curve remains unchanged.

Question Parts

( a )

Derive the original equilibrium price and quantity before any tax or technological change.

( b )

Write the new supply equation that incorporates both the ₦50 tax and the ₦10 cost‑reduction, and determine the new equilibrium consumer price, producer price, and quantity.

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About This Question

This is Gce Model Questions Vol1 2018 Economics Question 2. It is one of the essay questions from the 2018 Gce Model Questions Vol1 Economics examination.

The question covers Demand and Supply, Tax Incidence, Supply Shift, Welfare Analysis .

View More Gce Model Questions Vol1 2018 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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