Neco 2019 Economics Question 45
Practice objective / multiple choice question 45 from the 2019 Neco Economics examination.
The government imposes a specific tax \(t\) per unit on a good. Before the tax, the market price is ₦50 and supply is perfectly elastic at this price. The demand function (including the tax) is \(Q = 400 - 2t\), where \(t\) is the tax per unit in Naira. The government wants to raise exactly ₦15,000 in tax revenue. Determine the ad valorem tax rate \(r\) (as a percentage of the pre‑tax price) that will achieve this revenue target. (Recall that \(t = r \times 50\).)
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About This Question
This is Neco 2019 Economics Question 45. It is one of the objective questions from the 2019 Neco Economics examination.
Difficulty level: Medium .
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