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WAEC Economics 2013 Question 10

Question 10

Elasticity

Demand is elastic when percentage change in

  1. A.quantity demanded is greater than percentage change in price.
  2. B.price is greater than percentage change in quantity demanded.
  3. C.price is equal to one.
  4. D.quantity demanded is zero.
Show the answer and explanation

Answer: A (quantity demanded is greater than percentage change in price.)

Explanation

Elastic demand means quantity responds more than proportionately to price (coefficient > 1).