Waec Model Questions Vol1 2025 Economics Question 45

Practice objective / multiple choice question 45 from the 2025 Waec Model Questions Vol1 Economics examination.

Waec Model Questions Vol1 2025 Economics Objective / Multiple Choice Medium Difficulty
Question 45 WAEC_MODEL_QUESTIONS_VOL1 • 2025 • ECONOMICS • objective

The market demand for a product is Q = 500 - 2P (Q in thousand units, P in Naira). The current price is ₦120.\n(a) Compute the price elasticity of demand at this price and state whether demand is elastic or inelastic.\n(b) Using the linear approximation ΔTR/TR ≈ (1+ε)·ΔP/P, determine the approximate price increase (in Naira) required to raise total revenue by 5 %. Give the new price (rounded to the nearest Naira).

Answer Options

A. Elasticity ≈ -0.75 (inelastic); New price = ₦185
B. Elasticity ≈ -1.15 (elastic); New price = ₦210
C. Elasticity ≈ -0.60 (inelastic); New price = ₦170
Correct Answer D. Elasticity ≈ -0.92 (inelastic); New price = ₦198
Correct Answer
D
Correct Option:
Elasticity ≈ -0.92 (inelastic); New price = ₦198

About This Question

This is Waec Model Questions Vol1 2025 Economics Question 45. It is one of the objective questions from the 2025 Waec Model Questions Vol1 Economics examination.

Difficulty level: Medium .

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