Gce Model Questions Vol1 2025 Economics Question 3

Practice essay / theory question 3 from the 2025 Gce Model Questions Vol1 Economics examination. This question covers Elasticity .

Gce Model Questions Vol1 2025 Economics Essay / Theory

Topic: Elasticity

Question 3 GCE_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • essay

The table below shows the price (₦) and quantity demanded (units) of smartphones in Nigeria at two points in time. | Period | Price (₦) | Quantity Demanded (units) | |--------|-----------|---------------------------| | 1 | 250,000 | 12,000 | | 2 | 300,000 | 9,000 | Using this information, answer the following questions:

Question Parts

( a )

Calculate the price elasticity of demand between the two periods using the midpoint (arc) method. Show all steps of your calculation.

( b )

Interpret the magnitude of the elasticity you have obtained. What does it imply about consumer responsiveness to price changes in this market?

( c )

The government is considering imposing a specific tax of ₦5,000 on each smartphone sold. Discuss how the elasticity you calculated would affect: (i) the likely incidence of the tax on consumers versus producers; (ii) the impact of the tax on total revenue for sellers.

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About This Question

This is Gce Model Questions Vol1 2025 Economics Question 3. It is one of the essay questions from the 2025 Gce Model Questions Vol1 Economics examination.

The question covers Elasticity .

View More Gce Model Questions Vol1 2025 Economics Questions More Gce Model Questions Vol1 Practice Questions Back to Questions

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