Neco Model Questions Vol1 2025 Economics Question 2

Practice essay / theory question 2 from the 2025 Neco Model Questions Vol1 Economics examination. This question covers Demand and Supply .

Neco Model Questions Vol1 2025 Economics Essay / Theory

Topic: Demand and Supply

Question 2 NECO_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • essay

The market for a locally produced snack is described by the linear demand and supply equations below: Demand: Qd = 500 – 2P Supply: Qs = 100 + 3P where Q is quantity in units and P is price in naira per unit. The government imposes a specific tax of ₦50 per unit on producers of the snack.

Question Parts

( a )

Determine the equilibrium price and quantity before the tax is introduced.

( b )

Show how the supply curve shifts after the tax and write the new supply equation.

( c )

Calculate the new equilibrium price paid by consumers (Pc), the price received by producers (Pp), and the equilibrium quantity after the tax.

( d )

Using the results above, compute the consumer surplus, producer surplus and dead‑weight loss before and after the tax. Comment on the welfare effect of the tax.

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About This Question

This is Neco Model Questions Vol1 2025 Economics Question 2. It is one of the essay questions from the 2025 Neco Model Questions Vol1 Economics examination.

The question covers Demand and Supply .

View More Neco Model Questions Vol1 2025 Economics Questions More Neco Model Questions Vol1 Practice Questions Back to Questions

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