Neco Model Questions Vol1 2024 Economics Question 23

Practice objective / multiple choice question 23 from the 2024 Neco Model Questions Vol1 Economics examination.

Neco Model Questions Vol1 2024 Economics Objective / Multiple Choice Easy Difficulty
Question 23 NECO_MODEL_QUESTIONS_VOL1 • 2024 • ECONOMICS • objective

When the price of a product falls from \(\text{₦}200\) to \(\text{₦}150\), the quantity demanded rises from 5,000 units to 6,500 units. Using the midpoint method, calculate the price elasticity of demand and state whether total revenue will increase, decrease, or remain unchanged as a result of the price fall.

Answer Options

A. Elasticity ≈ -0.91 (elastic); total revenue decreases
Correct Answer B. Elasticity ≈ -0.91 (inelastic); total revenue decreases
C. Elasticity ≈ -0.45 (inelastic); total revenue remains unchanged
D. Elasticity ≈ -1.25 (elastic); total revenue increases
Correct Answer
B
Correct Option:
Elasticity ≈ -0.91 (inelastic); total revenue decreases

About This Question

This is Neco Model Questions Vol1 2024 Economics Question 23. It is one of the objective questions from the 2024 Neco Model Questions Vol1 Economics examination.

Difficulty level: Easy .

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