JAMB - Economics (2023 - No. 64)
When a kilogram of carrot is #8.00, 20 kilograms are demanded and when the price decreased to #6.000 per kilogram, 30 kilograms are demanded. The elasticity of demand equals to
11
12
\(\frac{1}{2}\)
2
Explanation
e = \(\frac{∆Q}{∆P}\times\frac{p}{q}\)
where ∆Q = Q2 - Q1 and ∆P = P2 - P1
e = \(\frac{30 - 20}{6 - 8}\times\frac{8}{20}\)
= -2 since price elasticity of demand is always positive, then e = 2
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