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JAMB Economics 2003 Question 17

Question 17

Elasticity

Price elasticity of supply is a ratio of the change in

  1. A.original quantity to a change in new quantity
  2. B.quantity supplied to the change in price
  3. C.price to the change in quantity supplied
  4. D.quantity supplied to the change in demand
Show the answer and explanation

Answer: B (quantity supplied to the change in price)

Explanation

Elasticity of supply = proportionate change in quantity supplied ÷ proportionate change in price.