When a kilogram of carrot is 8 00 20 kilograms ... - JAMB Economics 2023 Question

To calculate the elasticity of demand, you can use the formula:

\[ \text{Elasticity of Demand} = \frac{\% \text{ change in quantity demanded}}{\% \text{ change in price}} \]

The percent change in quantity demanded is calculated as:

\[ \text{\% change in quantity demanded} = \frac{\text{New Quantity Demanded} - \text{Old Quantity Demanded}}{\text{Old Quantity Demanded}} \times 100 \]

And the percent change in price is calculated as:

\[ \text{\% change in price} = \frac{\text{New Price} - \text{Old Price}}{\text{Old Price}} \times 100 \]

Given the information:

- Old Quantity Demanded = 20 kilograms
- New Quantity Demanded = 30 kilograms
- Old Price = ₦8.00 per kilogram
- New Price = ₦6.00 per kilogram

Let's plug these values into the formula:

\[ \text{\% change in quantity demanded} = \frac{30 - 20}{20} \times 100 = 50\% \]

\[ \text{\% change in price} = \frac{6 - 8}{8} \times 100 = -25\% \]

Now, substitute these values into the elasticity of demand formula:

\[ \text{Elasticity of Demand} = \frac{50\%}{-25\%} = -2 \]

Therefore, the correct option is 2 since the price elasticity of demand is always positive.