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JAMB Economics 1979 Question 21

Question 21

Elasticity

If the quantity demanded of a commodity increases from 20 to 30 when there is an increase in price from N4 to N5, the elasticity of demand is

  1. A.0
  2. B.1
  3. C.2
  4. D.5
  5. E.10.
Show the answer and explanation

Answer: C (2)

Explanation

% change in quantity = 10/20 = 50%; % change in price = 1/4 = 25%; elasticity = 50 ÷ 25 = 2.