JAMB Economics 2023 Paper

Concept:Price elasticity of demand measures how much quantity demanded responds to a change in price.It is calculated using the point elasticity formula on the demand function.Explanation:The demand function is $Q_d = 30 - 4P$.Given $P = 4$, the quantity demanded is $Q = 14$.Check: $Q_d = 30 - 4(4) = 30 - 16 = 14$.The slope of the demand function is $\frac{\Delta Q}{\Delta P} = -4$.Use the price elasticity of demand formula: $E_d = \frac{\Delta Q}{\Delta P} \times \frac{P}{Q}$.Substitute the values: $E_d = -4 \times \frac{4}{14}$.Simplify: $E_d = -\frac{16}{14} = -1.14$.Elasticity is usually expressed as a positive number, so $E_d = 1.14$.Thus, the correct option is A.Answer:A. $1.14$