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WAEC Economics 2021 Question 11

Question 11

Elasticity

The price of soap rose from $10 to $20 causing a trader to increase her supply from 50 to 120 boxes per week. This makes supply

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

Answer: C (fairly elastic.)

Explanation

Quantity rose 140% for a 100% price rise: Es = 1.4, greater than 1 (fairly elastic).