JAMB Economics 1994 Question 24

Question 24

Elasticity

Cross elasticity of demand can be mathematically expressed as the

A.(percentage change in quantity of commodity X) ÷ (percentage change in quantity of commodity Y)
B.(percentage change in quantity demanded) ÷ (percentage change in price)
C.(percentage change in quantity demanded of commodity X) ÷ (percentage change in price of commodity Y)
D.(percentage change in quantity demanded) ÷ (percentage change in income)

Show the answer and explanation

Answer: C ((percentage change in quantity demanded of commodity X) ÷ (percentage change in price of commodity Y))

Explanation

Cross elasticity measures how demand for X responds to a change in the price of another good Y.