JAMB Economics 2014 Objective — Question 10

Question 10 of 50 from the Joint Admissions and Matriculation Board (JAMB) Economics 2014 Objective paper, with the correct answer and a full explanation.

If a 10% rise in price causes a 5% decrease in the quantity demanded of a commodity, the elasticity of demand is

A. inelasticCorrect
B. unitary elastic
C. zero elastic
D. elastic

Explanation

For inelastic demand, the percentage change in quantity demanded (5%) is less than the percentage change in price (10%).

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