Waec Model Questions Vol1 2025 Economics Question 38
Practice objective / multiple choice question 38 from the 2025 Waec Model Questions Vol1 Economics examination.
Road freight currently costs ₦120 per tonne and moves 500,000 tonnes per year, generating a total revenue of ₦60 million. The government imposes a fuel tax that raises the road cost by 15 %. The price elasticity of demand for road freight is -1.2. Rail transport can move freight at a constant cost of ₦100 per tonne but has a capacity limit of 200,000 tonnes per year. After the tax, (a) what is the new quantity of road freight and the resulting revenue? (b) What percentage of the original total freight should be shifted to rail (subject to the rail capacity) to minimise total transport cost?
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About This Question
This is Waec Model Questions Vol1 2025 Economics Question 38. It is one of the objective questions from the 2025 Waec Model Questions Vol1 Economics examination.
Difficulty level: Hard .
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