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JAMB Economics 2012 Question 9

Question 9

Elasticity

Use the table below to answer the question.
Price (₦) | Quantity (kg)
50 | 500
70 | 400
From the table above, calculate the price elasticity of demand.

  1. A.5.0
  2. B.2.0
  3. C.1.0
  4. D.0.5
Show the answer and explanation

Answer: D (0.5)

Explanation

% change in quantity = (500 − 400)/500 × 100 = 20%. % change in price = (70 − 50)/50 × 100 = 40%. Elasticity = 20/40 = 0.5.