JAMB Economics 2012 Objective — Question 9

Question 9 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2012 Objective paper, with the correct answer and a full explanation.

Price (#) 50, Quantity(kg) 500; Price(#) 70, Quantity(kg) 400. From the table above, calculate the price elasticity of demand

A. 5.0
B. 2.0
C. 1.0
D. 0.5Correct

Explanation

%Δ in q = ((400−500)/500)×100 = -20%. %Δ in p = ((70−50)/50)×100 = 40%. Elasticity = -20/40 = -0.5, hence |0.5| — the price elasticity of demand is inelastic.

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