When a kilogram of carrot is ₦8.00, 20 kilograms are demande…
Source: JAMB · 2023
When a kilogram of carrot is ₦8.00, 20 kilograms are demanded and when the price decreased to ₦6.000 per kilogram, 30 kilograms are demanded. The elasticity of demand equals to
Explanation
Change in quantity = 30 − 20 = 10, which is 10 ÷ 20 = 50%.
Change in price = 8 − 6 = 2, which is 2 ÷ 8 = 25%.
Elasticity = 50% ÷ 25% = 2. Demand is elastic.
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