Neco 2020 Economics Question 46

Practice objective / multiple choice question 46 from the 2020 Neco Economics examination.

Neco 2020 Economics Objective / Multiple Choice Medium Difficulty
Question 46 NECO • 2020 • ECONOMICS • objective

If \( Q_d = 120 - 4P \) and supply \( Q_s = 20 + 2P \), find the equilibrium price and quantity. Then compute the price elasticity of demand at equilibrium using \( E = \frac{dQ}{dP}\times\frac{P}{Q} \). If the price is increased by 10% from the equilibrium price, will total revenue increase or decrease? State your answer.

Answer Options

A. Total revenue will increase.
Correct Answer B. Total revenue will decrease.
C. Total revenue will first increase then decrease.
D. Total revenue will remain unchanged.
Correct Answer
B
Correct Option:
Total revenue will decrease.

About This Question

This is Neco 2020 Economics Question 46. It is one of the objective questions from the 2020 Neco Economics examination.

Difficulty level: Medium .

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