Gce Model Questions Vol1 2020 Economics Question 3

Practice essay / theory question 3 from the 2020 Gce Model Questions Vol1 Economics examination. This question covers Elasticity .

Gce Model Questions Vol1 2020 Economics Essay / Theory

Topic: Elasticity

Question 3 GCE_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • essay

A small textile firm sells a single type of shirt. The table below shows the price per shirt (in ₦) and the corresponding quantity demanded per week. | Price (₦) | Quantity demanded (units) | |-----------|---------------------------| | 500 | 2000 | | 550 | 1800 | | 600 | 1650 | Using this information, answer the following:

Question Parts

( a )

Calculate the price elasticity of demand between the first two rows (price 500 ₦ to 550 ₦) using the midpoint method.

( b )

Interpret the magnitude of the elasticity you obtained and explain what it implies for the firm’s total revenue if it raises the price.

( c )

If the price is increased from ₦500 to ₦600, estimate the expected percentage change in quantity demanded using the elasticity from part (a).

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About This Question

This is Gce Model Questions Vol1 2020 Economics Question 3. It is one of the essay questions from the 2020 Gce Model Questions Vol1 Economics examination.

The question covers Elasticity .

View More Gce Model Questions Vol1 2020 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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