Neco 2024 Economics Question 2

Practice essay / theory question 2 from the 2024 Neco Economics examination. This question covers Demand and Supply .

Neco 2024 Economics Essay / Theory

Topic: Demand and Supply

Question 2 NECO • 2024 • ECONOMICS • essay

The market for a locally produced snack is described by the following linear equations: \(Q_d = 500 - 2P\) (quantity demanded) and \(Q_s = 3P - 150\) (quantity supplied), where \(P\) is the price in Naira per unit and \(Q\) is quantity in thousands of units. The government introduces a specific tax of \(\text{₦}50\) per unit on sellers. Answer the following:

Question Parts

( a )

Determine the equilibrium price and quantity before the tax is imposed.

( b )

Write the new supply equation after the tax and compute the new equilibrium price paid by buyers and the price received by sellers.

( c )

Calculate the incidence of the tax on buyers and sellers (i.e., how much of the ₦50 tax is borne by each side) and discuss briefly the effect of the tax on total welfare (dead‑weight loss).

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About This Question

This is Neco 2024 Economics Question 2. It is one of the essay questions from the 2024 Neco Economics examination.

The question covers Demand and Supply .

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