Price Quantity Demanded 8 10 6 12 If we move fr... - JAMB Economics 2019 Question
| Price (₦) |
Quantity Demanded |
| 8 | 10 |
| 6 | 12 |
If we move from 8 to 6, the elasticity of demand is_______
A
-1.25
B
0.62
C
1.25
D
1
correct option: c
NOTE : The elasticity of demand is always positive. Therefore, the negative sigin is ignored or extra negetive sign is introduced to make it postive.
The elasticity of demand is calculated using:
| ρd | = | % Δ in P
% Δ in Q |
Where P = Price
Q = Quantity Demanded
Therefore,
| % | Δ | in | P | = | 6 - 8
8 | × | 100 |
= -25%
| % | Δ | in | Q | = | 12 - 10
10 | × | 100 |
= 20%
| ρd | = | -25
20 | = | -1.25 | = | 1.25 |
The answer is 1.25
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