Neco 2023 Economics Question 3

Practice essay / theory question 3 from the 2023 Neco Economics examination. This question covers Elasticity .

Neco 2023 Economics Essay / Theory

Topic: Elasticity

Question 3 NECO • 2023 • ECONOMICS • essay

The table below shows the quantity of wheat demanded at various prices in a competitive market. | Price (₦ per kg) | Quantity demanded (thousand kg) | |------------------|---------------------------------| | 150 | 80 | | 200 | 65 | | 250 | 55 | | 300 | 48 | Using the data above, answer the following questions:

Question Parts

( a )

Calculate the price elasticity of demand between the price of ₦200 and ₦250 per kg using the midpoint (arc) method.

( b )

Classify the elasticity obtained in part (a) and explain what it implies for the firm’s total revenue when price rises from ₦200 to ₦250 per kg.

( c )

The government imposes a specific tax of ₦20 per kg on wheat. Discuss qualitatively how this tax is likely to affect the equilibrium price paid by consumers, the equilibrium quantity, and the total revenue of wheat sellers, using the elasticity concept derived earlier.

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About This Question

This is Neco 2023 Economics Question 3. It is one of the essay questions from the 2023 Neco Economics examination.

The question covers Elasticity .

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