Neco Model Questions Vol1 2020 Economics Question 3

Practice essay / theory question 3 from the 2020 Neco Model Questions Vol1 Economics examination. This question covers Elasticity .

Neco Model Questions Vol1 2020 Economics Essay / Theory

Topic: Elasticity

Question 3 NECO_MODEL_QUESTIONS_VOL1 • 2020 • ECONOMICS • essay

A certain consumer good has the following linear demand and supply functions: Demand: Qd = 200 – 4P Supply: Qs = 20 + 2P where Q is quantity (units) and P is price (₦ per unit).

Question Parts

( a )

Define price elasticity of demand (PED) and state the formula used for its calculation at a given point on a linear demand curve.

( b )

Determine the equilibrium price and quantity of the good.

( c )

Calculate the price elasticity of demand at the equilibrium using the point‑elasticity formula.

( d )

Interpret the magnitude of the elasticity obtained and discuss two possible policy implications for the government if it intends to impose a specific tax on this good.

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About This Question

This is Neco Model Questions Vol1 2020 Economics Question 3. It is one of the essay questions from the 2020 Neco Model Questions Vol1 Economics examination.

The question covers Elasticity .

View More Neco Model Questions Vol1 2020 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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