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JAMB Economics 1983 Question 47

Question 47

Elasticity

When demand is elastic, it means that consumers

  1. A.react more proportionately to price change
  2. B.are not sensitive to price change
  3. C.will stop buying when price increases
  4. D.react less proportionately to price change
  5. E.react equally to price change.
Show the answer and explanation

Answer: A (react more proportionately to price change)

Explanation

Elastic demand means the percentage change in quantity demanded is greater than the percentage change in price.