Neco 2017 Economics Question 6

Practice essay / theory question 6 from the 2017 Neco Economics examination. This question covers Market Structures .

Neco 2017 Economics Essay / Theory

Topic: Market Structures

Question 6 NECO • 2017 • ECONOMICS • essay

The market for smartphones in Nigeria can be approximated by linear demand and supply curves. The following observations are available: - When the price is ₦150,000, the quantity demanded is 20,000 units and the quantity supplied is 8,000 units. - When the price is ₦200,000, the quantity demanded falls to 12,000 units while the quantity supplied rises to 14,000 units.

Question Parts

( a )

Derive the linear demand equation of the form P = a – bQ using the two demand observations.

( b )

Derive the linear supply equation of the form P = c + dQ using the two supply observations.

( c )

Calculate the market equilibrium price and quantity.

( d )

If the government imposes a price ceiling of ₦180,000, determine the resulting shortage (excess demand) and discuss the likely impact on consumer and producer surplus.

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About This Question

This is Neco 2017 Economics Question 6. It is one of the essay questions from the 2017 Neco Economics examination.

The question covers Market Structures .

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