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JAMB Economics 1980 Question 10

Question 10

Elasticity

In the figure, we can describe the demand as

Diagram for this question
  1. A.perfectly elastic
  2. B.having unit elasticity
  3. C.perfectly inelastic
  4. D.fairly elastic
  5. E.all of the above.
Show the answer and explanation

Answer: D (fairly elastic)

Explanation

The demand curve slopes gently downward, so quantity responds quite strongly to price: demand is fairly elastic, neither perfectly elastic (flat) nor perfectly inelastic (vertical).