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WAEC Economics 2025 Question 2

Question 2

Elasticity

Good X has a price elasticity of demand of 0.25. This means it

  1. A.is a luxury good.
  2. B.has many close substitutes.
  3. C.has few substitutes.
  4. D.is not purchased out of habit.
Show the answer and explanation

Answer: C (has few substitutes.)

Explanation

An elasticity of 0.25 is inelastic, which is typical of goods with few substitutes.