If the quantity demanded of a commodity increases from 20 units to 30 units when
ECONOMICS
JAMB 2022
If the quantity demanded of a commodity increases from 20 units to 30 units when there is an increase in price from $4.00 to $5.00, the elasticity of demand is
- A. 0.50
- B. 0.65
- C. 2.00
- D. 2.50
Correct Answer: C. 2.00
Explanation
e = ?Qd/?P x P/Qd = 30 - 20/ 5 - 4 x 4/ 20 = 10/1 x 4/20 = 2
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