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JAMB Economics 2021 Paper

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Question : 39

Total: 40

If the quantity demanded of a commodity increases from 20 to 30 when there is an increase in price from N4 to N5, the elasticity of deman is_______

Zero
10
2
1

Solution:

Concept:

Price elasticity of demand measures how quantity demanded responds to a change in price:

\text{Elasticity} = \frac{\%\Delta Q}{\%\Delta P}

.

Explanation:

Change in quantity demanded

= 30 - 20 = 10

Percentage change in quantity

= \frac{10}{20} \times 100 = 50\%

Change in price

= 5 - 4 = 1

Percentage change in price

= \frac{1}{4} \times 100 = 25\%

Elasticity of demand

= \frac{50\%}{25\%} = 2

Answer:

C. 2

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