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WAEC Economics 1996 Question 6

Question 6

Elasticity

If the price of a commodity rises from N2.00 to N4.00 and its supply increases from 100 to 125, then the co-efficient of elasticity of supply is

  1. A.0.025
  2. B.0.24
  3. C.0.22
  4. D.0.25
  5. E.0.23
Show the answer and explanation

Answer: D (0.25)

Explanation

% change in supply = 25/100 = 25%; % change in price = 2/2 = 100%; Es = 25 ÷ 100 = 0.25.