Gce Model Questions Vol1 2025 Economics Question 27
Practice objective / multiple choice question 27 from the 2025 Gce Model Questions Vol1 Economics examination.
A city bus company operates a route with 5,000 passenger trips per month. The average fare is ₦500 per trip. Variable cost per passenger is ₦300 and fixed monthly cost is ₦200,000. The price elasticity of demand for the route is \(-0.4\) (i.e., a 1 % fare increase reduces trips by 0.4 %). The company wishes to raise its monthly profit by 20 %. Determine the percentage fare increase required and the new fare (rounded to the nearest Naira).
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About This Question
This is Gce Model Questions Vol1 2025 Economics Question 27. It is one of the objective questions from the 2025 Gce Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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