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JAMB Economics 2013 Question 9

Question 9

Elasticity

If the price of a bicycle changes from N120 to N80 and the quantity bought changes from 300 to 500 units, the elasticity of demand for bicycle is

  1. A.66.7
  2. B.0.5
  3. C.1.5
  4. D.2.0
Show the answer and explanation

Answer: D (2.0)

Explanation

% change in quantity = 200/300 × 100 = 66.7%. % change in price = 40/120 × 100 = 33.3%. Elasticity = 66.7/33.3 = 2.