Neco Model Questions Vol1 2023 Economics Question 2

Practice essay / theory question 2 from the 2023 Neco Model Questions Vol1 Economics examination. This question covers Demand and Supply .

Neco Model Questions Vol1 2023 Economics Essay / Theory

Topic: Demand and Supply

Question 2 NECO_MODEL_QUESTIONS_VOL1 • 2023 • ECONOMICS • essay

In a local Lagos market for bottled water the demand and supply relationships (quantities in thousands of litres, price in ₦ per litre) are given by: Qd = 120 – 0.5P Qs = –20 + 0.4P

Question Parts

( a )

Determine the equilibrium price and quantity in this market.

( b )

The government imposes a specific tax of ₦10 per litre on producers. Write the new supply equation, then calculate (i) the new equilibrium price paid by consumers, (ii) the price received by producers, (iii) the equilibrium quantity, and (iv) the total tax revenue collected.

( c )

Explain, using the concepts of price elasticity of demand and supply, how the burden of the tax is shared between consumers and producers in this market.

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About This Question

This is Neco Model Questions Vol1 2023 Economics Question 2. It is one of the essay questions from the 2023 Neco Model Questions Vol1 Economics examination.

The question covers Demand and Supply .

View More Neco Model Questions Vol1 2023 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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