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JAMB Economics 2009 Question 13

Question 13

Elasticity

If the price of an item changes by 8% and quantity supplied changes from 600 units to 660 units, the price elasticity of supply is

  1. A.0.80
  2. B.1.25
  3. C.2.00
  4. D.10.00
Show the answer and explanation

Answer: B (1.25)

Explanation

% change in quantity = 60/600 × 100 = 10%; elasticity = 10 ÷ 8 = 1.25.