Neco Model Questions Vol1 2024 Economics Question 19

Practice objective / multiple choice question 19 from the 2024 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2024 Economics Objective / Multiple Choice Medium Difficulty
Question 19 NECO_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

The demand for a product is given by \(Q = 120 - 2P\), where \(Q\) is quantity demanded and \(P\) is price (in Naira). The firm currently sells at price \(P = 30\). (i) Determine the price elasticity of demand at this price. (ii) If the firm raises the price to \(P = 35\), will total revenue increase, decrease, or remain unchanged? State the expected change.

Answer Options

A. Elasticity = -0.5; total revenue will increase
B. Elasticity = -1; total revenue will remain unchanged
C. Elasticity = -2; total revenue will increase
Correct Answer D. Elasticity = -1; total revenue will decrease
Correct Answer
D
Correct Option:
Elasticity = -1; total revenue will decrease

About This Question

This is Neco Model Questions Vol1 2024 Economics Question 19. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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