JAMB Economics 2012 Objective — Question 10
Question 10 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2012 Objective paper, with the correct answer and a full explanation.
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If the price of an item increases by 8% while the quantity demanded falls from 1500 units to 1492 units, the demand is said to be a. perfectly elastic B. inelastic C. elastic D. perfectly inelastic
- A. perfectly elastic
- B. inelasticCorrect
- C. elastic
- D. perfectly inelastic
Explanation
%Δq = ((1492−1500)/1500)×100 = -0.53%. %Δp=8%. Elasticity = 0.53/8 = 0.0663, which is less than 1, hence it is inelastic.
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