If the quantity demanded of a commodity increases from 20 to 30 when there is an increase in price from N4 to N5, the elasticity of deman is_______

Analyze the question

Quantity demanded rises from 20 to 30 while price rises from N4 to N5. We need the price elasticity of demand (PED).

Concept

PED = % change in quantity demanded ÷ % change in price

(Using the simple percentage-change method based on the original values.)

Solution

• Change in quantity = 30 − 20 = 10
• % change in quantity = (10/20) × 100 = 50%
• Change in price = 5 − 4 = 1
• % change in price = (1/4) × 100 = 25%

PED = 50% ÷ 25% = 2

(Ignoring the sign, since in this question demand rose with price, which is unusual, and the question just wants the magnitude.)

Check with the midpoint method:

• % change in Q = 10/25 = 40%
• % change in P = 1/4.5 ≈ 22.2%
• PED = 40 ÷ 22.2 ≈ 1.8, which is closest to 2 among the options.

Either way, the answer that fits the options is 2. The other options do not work out:

• A (Zero) would mean quantity does not respond to price at all, but quantity changed.
• B (10) is just the change in quantity, not the elasticity.
• D (1) would need the percentage changes to be equal.

Answer: C (2)

Exam tip: In JAMB, use the formula PED = (ΔQ/Q) ÷ (ΔP/P) with the original values unless told otherwise. Calculate each percentage separately, then divide. Do not stress about the sign; the options usually give the magnitude only.