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JAMB Economics 2010 Question 16

Question 16

Elasticity

If the coefficient of price elasticity of supply is greater than one, the supply is said to be

  1. A.perfectly elastic
  2. B.fairly inelastic
  3. C.infinitely inelastic
  4. D.fairly elastic.
Show the answer and explanation

Answer: D (fairly elastic.)

Explanation

A coefficient above one (but not infinite) means supply is elastic, i.e. fairly elastic.