Neco 2025 Economics Question 2

Practice essay / theory question 2 from the 2025 Neco Economics examination. This question covers Equilibrium, Tax Incidence, Price Elasticity of Demand, Policy Implications .

Neco 2025 Economics Essay / Theory

Topics: Equilibrium Tax Incidence Price Elasticity of Demand Policy Implications

Question 2 NECO • 2025 • ECONOMICS • essay

The following tables show the demand and supply schedules for Good X in a closed economy. Demand Schedule: Price (₦) : 100 80 60 40 20 Quantity Demanded (units): 20 30 45 65 90 Supply Schedule: Price (₦) : 100 80 60 40 20 Quantity Supplied (units): 80 65 45 30 15

Question Parts

( a )

Determine the equilibrium price and quantity of Good X.

( b )

The government introduces a specific tax of ₦10 per unit on producers of Good X. Calculate the new equilibrium price paid by consumers and the new equilibrium quantity.

( c )

Using the midpoint method, compute the price elasticity of demand at the original equilibrium (₦60, 45 units).

( d )

Briefly discuss one limitation of relying on the elasticity calculated in part (c) for making long‑term tax policy decisions.

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About This Question

This is Neco 2025 Economics Question 2. It is one of the essay questions from the 2025 Neco Economics examination.

The question covers Equilibrium, Tax Incidence, Price Elasticity of Demand, Policy Implications .

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